Daily update
Daily update
- German October factory orders were weaker—although (being Germany) earlier data was revised stronger. Switching from spending on goods to spending on fun continues. Germany has a strong reputation as an exporter of goods. It has a relatively less strong reputation as an exporter of fun.
- Eurozone retail sales data should confirm this trend. No one will pay much attention to the figures as no one ever pays too much attention to Eurozone figures, but it reinforces the narrative.
- US revised 3Q unit labor cost and productivity data will be wrong; the data is derived from GDP numbers that will be revised. But the idea of very weak unit labor costs is plausible. It is unit labor costs, not wages (and absolutely not average hourly earnings) that best reflect labor cost inflation pressures. The trends in unit labor costs make clear labor markets were never really “tight”, and that profits rather than labor were behind the latest inflation episode.
- The Financial Times surveyed 40 academic economists, who expect the Federal Reserve to ease rates in July. This may be correct—Fed Chair Powell’s “data dependency” could produce any result when data is not dependable. But asking academic economists for precise central bank forecasts seems a little peculiar.
