Daily update
Daily update
- UK retail sales volumes were weak in December. Consumer rebellion over profit-led inflation pushed consumers into buying earlier when discounts were on offer, and simply refusing to consume when prices were higher. Online retail also slowed, but fared a lot better than in person retail. Elsewhere German producer prices continued in deflation in December.
- One thing economists learn early in their studies is the concept of diminished marginal utility. The more you have, the less incremental benefit you get. ECB President Lagarde is speaking today. ECB President Lagarde spoke yesterday. ECB President Lagarde spoke twice on Wednesday. The law of diminishing marginal utility may apply (assuming the original remarks had some utility).
- The Federal Reserve’s Barr is speaking on bank regulation. Bank regulation is often the forgotten pillar of central bank policy (monetary, quantitative, regulatory), but might start to matter more. Issues like “buy now, pay later” credit are causing concern, and regulators have yet to respond to last year’s Twitter-era bank runs.
- Michigan consumer sentiment data is not very useful information. Consumers are bad at predicting inflation (there was an excellent article in yesterday’s New York Times on that point). The redeeming feature of the Michigan numbers is political breakdown of sentiment, revealing how much of a distortion political polarization is.