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Economists make a joke

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The World Bank revised its 2018 global growth forecast higher by 0.2ppt. This is an example of the economic profession's rather subtle sense of humor. No economist believes that anyone can be more accurate than (at best) a 0.5% range in global growth. The world is doing OK, growing about its trend rate. Ignore the decimal points.
  • Chinese consumer and producer price inflation numbers are due. Both are a domestic matter. Consumer prices are about food and housing (neither is a noted Chinese export). There is a weak relationship between Chinese producer prices and Chinese export prices, and a weak relationship between Chinese export prices and overseas consumer prices.
  • French and British manufacturing production data will be released. Both have political overtones. The French have the context of President Macron's attempts at reform. The British have the context of the long goodbye from Europe.
  • US import and export price data is most likely to be notable for what it does not show rather than for what it does show. The impact of the dollar's 2017 decline on US import prices should be limited (aside from commodities). Export prices should increase in dollar terms as US exporters aim for profits rather than volume of sales.