- The pandemic accelerated structural change in the global economy. The world will never be the same again. Unfortunately, media and markets continue to ignore this change. There is an absurd level of trust that economic data is accurate, and a failure to challenge what the data is saying.
- Second quarter real GDP was reported as being far weaker in the UK than in France, despite many more British people than French people working during lockdown. One reason is that UK education output measures pupil numbers, but France measures teachers' wages. When schools close, those methods give very different GDP outcomes. Actual economic performance in France and the UK was probably about the same in the second quarter.
- As lockdowns ended, manufacturing PMI data suggested large falls in output. In the same month official real-world data reported record gains. Yet PMI data is still reported as if it were actual economic activity. The problems of sentiment data in a pandemic are ignored.
- Parts of inflation data are still largely guesswork. The weightings of different items do not reflect consumption shifts. Inflation will be volatile (if low) as long as this continues.
- The world is changing faster than data measurement. Challenging data is vital if investors are to avoid making mistakes.