Daily update
Daily update
- In one sense the global economic story is very clear—but is it obvious enough even Federal Reserve Chair Powell will notice? Cooling consumer goods demand is keeping disinflation pressures alive. China’s August export data showed another (expected) significant drop. The data is now consistent with counterparts’ trade data (unlike earlier this year when China reported exports no one seemed to be importing).
- German July industrial production fell again, even with energy production flattering the data. Consumer goods production growth was negative. Of course (being German data), the previous month was revised, and was revised higher.
- On the other side of the supply-demand balance, the Fed’s Beige Book of economic anecdotes reported cooling consumption, highlighting disinflation forces in manufacturing and consumer goods. US consumer durable goods prices have been in deflation since December 2022, one of the most dramatic reversals of inflation pressure in modern times.
- US productivity and unit labor costs are due. Wage growth influences consumer spending power, labor costs influence either profits or inflation—the difference between the two is productivity (how hard people work). In real time this is an unreliable number. UK reported productivity just increased, not because people are working harder in reality but because there were significant revisions to GDP.
