Daily update
Daily update
- UK data offers some global insight—not because the UK matters globally, but because many economies are following similar patterns in growth (and economic parallels are more convincing when delivered with a British accent). British Retail Consortium retail sales figures fell sharply in real terms. Falling real incomes mean falling consumption (the slump scenario) unless consumers cut savings or increase borrowing.
- UK credit card data showed an additional driver of goods demand deflation—consumers are spending on having fun. Economists are not against having fun—who doesn’t enjoy sitting in the sun with the latest Journal of Economic Literature? But holiday costs are rising and consumers are paying almost any price to celebrate the post-pandemic world. More money spent on ever more expensive holidays means less money to spend in other areas of the economy.
- The US NFIB survey of small business sentiment is due. This survey has a very high correlation with Republican supporters’ sentiment, and in very politically polarized times that may mean the reported results differ from reality.
- US second quarter unit labor costs and productivity data are due—these will be revised whenever GDP is revised. Selected sectors have seen productivity gains as automation has increased, but this may be lost when aggregated up to a national level.
