Daily update
Daily update
- US September retail sales data were old news, but slightly softer. While it is tempting to blame the accelerating US inflation rate, retail sales are nominal numbers and include inflation effects. Pessimism should be limited, however. The numbers will almost certainly be revised. Ongoing shifts in consumption patterns have consequences (Instagrammers showcasing their latest holiday contribute less to retail sales than buyers of new washing machines). Credit card data suggests no reason to panic.
- The data drought of the US government shutdown places excessive emphasis on old data—and also anecdotal data like today’s Federal Reserve Beige Book. This has shown some signs of political bias in the comments. Anecdotes on whether tariff passthrough is speeding up is of interest.
- The UK budget has generated a local media frenzy bordering on mass hysteria. Outside this bubble, few people really care. The UK was the fastest growing major economy in the first half of this year. The debt level has plateaued for several years. But the government has tied itself into a tight fiscal straitjacket, and the legacy of the Truss debacle has left faith in fiscal competence in a fragile state.
- There are a few central bankers crowding the agenda, including (yet again) ECB President Lagarde.