Daily update
Daily update
- The word “recession” is a curse cast on the economics profession. There is no formal, universal definition. The media’s obsession with “two consecutive quarters of negative growth” is increasingly meaningless in the modern world. Output economic measures like GDP depend on how many people are working, and how hard those people are working. Thus, countries with declining populations are more likely to have falling GDP, but are not more likely to have falling living standards.
- German third quarter GDP is expected to fall. Germany has a declining population. It also has an unusually sizable manufacturing sector for a developed economy, making it vulnerable to the slowing global trade in goods. While the second quarter data showed static rather than negative growth, the numbers may be revised.
- Spain and Germany offer preliminary October consumer price inflation. The consensus expects a 3.3% y/y rate for Germany—close to target. Economics is not precise. A competent policy-maker would assume a 2% target is met within a 1–3pps range. The UK offers consumer credit and mortgage data.
- The Israel-Hamas war has entered a new phase, with Israeli troops expanding operations in Gaza. Investors seemingly price a low probability of the conflict widening in the Middle East region, and oil prices have fallen.
