Daily update
Daily update
- The effects of weak pay bargaining power are starting to catch up with developed economy consumers. Real spending is tending to be negative. The UK British Retail Consortium survey of retail sales and Barclaycard credit card data showed falling real consumer spending. High food prices meant money had to switch to food retailers—profit-led inflation can move profits from sectors of the economy with weaker pricing power to those that can get away with margin expansion.
- Japanese real wages continued to decline in April, as did real household spending. Ahead, Eurozone April retail sales are also expected to show a real decline. Some of these declines are base effects (last year’s consumer strength could not last).
- German April factory orders are due. With global production data fairly soft of late, this may get some additional attention.
- A Frank Knight survey suggests around half of the world’s multinationals intend to cut office space in the coming years. Countries like the UK have 44% of workers working from home. This implies economies will make more efficient use of their land and existing capital stock. That means economies that raise living standards through efficiency may also experience less investment and lower GDP, underscoring the problems of equating GDP to economic wellbeing.
