Stability in economics. Shame about the politics

Posted by: Paul Donovan

02 Apr 2019
  • Economic data has become less reliable over time. Structural change is not easily captured in economic data, and normal people do not complete surveys any more. This means it is helpful to pay as much (perhaps more) attention to data revisions as to the initial estimates. There were some big positive revisions to US consumer data yesterday.
  • Broadly, the global data trend is starting to indicate stabilization. A key part of the slower growth in 2018 was weaker company investment (which hits economies directly, and indirectly via exports). US durable goods orders give some hints as to company investment, though the trend is a better guide than a single data point.
  • Eurozone producer price inflation will signal corporate pricing power (it is a far better signal than is consumer price inflation), at a time of rising costs.
  • The interminably tedious UK-EU divorce goes on and on in a Mobius loop of pointlessness. Parliament has rejected everything, again, and may have a third opportunity to reject things on Wednesday. The UK cabinet meets for a five-hour session today. Unnamed officials suggest that the UBS's central case of a lengthy delay to the divorce will be discussed.

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