The difference between Germany and Spain

Posted by: Paul Donovan

06 Nov 2019
  • German factory orders are due. Germany does still have factories, and they do still make things. The German problem is that their factories make a lot of investment goods, and the world is still not investing much. Spanish industrial output data is far less vulnerable to this problem.
  • Euro area retail sales data is not very interesting, to be honest. However it does show the contrast. While Europeans traditionally do not match the hedonism of the American consumer, spending on durable goods has been good – suggesting consumers have some confidence in the future.
  • US productivity data and the associated unit labor cost numbers are due. This data should be useful, but productivity is basically all the bits of GDP that economists do not understand. GDP itself is a wild and often inaccurate guess by statisticians at what is happening in the economy. Data that should be interesting comes with quite a large accuracy warning, therefore.
  • Frequency bias occurs when things we do or see frequently assume far, far more importance than they merit – just because they are frequent. Coincidentally, markets will be showered with yet another set of business sentiment opinion poll data today. These numbers are released very frequently.

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