- Once again, economists are forced to look down from the higher intellectual plane that they occupy, and comment on market moves. Equities had a difficult day yesterday, but not much changed economically. The concern seems to be the rising virus infection rate in parts of the US. Economically, the virus has never mattered much – it is fear of the virus that matters (either policy makers' fears or consumers' fears).
- So far, there does not seem to be an increase in fear alongside the increase in infections. Credit card and mobility numbers are showing improving economic trends. This may change if the infection rates continue to increase, of course, but for now fear seems to be contained.
- The UK economy contracted about a fifth in April, according to the monthly GDP data (normal warnings about data quality apply). Compared to the labor market, that suggests rising productivity. There is a hint that companies may be using inventory to meet consumer demand in lockdowns.
- Final consumer price inflation data for May is released from some European economies – it really is not worth bothering with. The detail of this data is meaningless, and the near-term trend is for disinflation. US Michigan consumer confidence is similarly unimportant.