Daily update
Daily update
- The US offers initial jobless claims data, which always attracts some attention, but may become more of a focus. Job security may define the economic dividing line between economic slowdown and economic slump. Security means savings can supplement falling real incomes, and keep consumption going. Insecurity means savings are hoarded, and consumption must start to reflect falling real incomes.
- The US trade balance is also due—with trade attention shifting from how much goods supply has increased, to how much goods demand has moderated. Moderating durable goods demand has had a strong disinflation impulse in the US.
- The Bank of England decides rates today. There has been no explicit forward guidance (so no possibility of a credibility-damaging breach with forward guidance). Uncertainty about future fiscal policy is an issue. Oxford PPE graduate Sunak and Oxford PPE graduate Truss have very different fiscal plans. Bank of England Governor Bailey (not a PPE graduate, and shockingly not an Oxford graduate) might have to raise rates significantly in the future to offset inflation consequences from Truss’s proposals.
- German June factory orders were slightly better than expected, though in a very rare development the previous month’s data was not revised stronger. Mester of the Federal Reserve is scheduled to speak today.
