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Turning from Twitter to trends

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Economists can turn their attention from the Trump Twitter feed to economic data. The US employment report is due. US President Trump indicated he does not believe the data. This is sensible. Employment data is revised frequently, and mainly survey-based. Rather than trust a single data release, economists look at trends.
  • Trends show the US at full employment. US labor markets are divided – it is very difficult for a low-skilled worker to move into a highly responsible job, for instance. The 2016 change was that a broad range of measures showed low-skilled workers getting pay increases and work (raising inflation pressures).
  • Service sector business sentiment opinion polls are released from various economies – it would be nice if investors were as skeptical about these opinion polls as they are about every other opinion poll, but instead PMI data attracts unnecessary reverence. Economic fundamentals support strong sentiment – politics may be less supportive.
  • The EU leaders meet for a summit in Malta, where the US president's international relations approach will doubtless be discussed. The UK prime minister will pop in for a morning, but is not going to be staying.