Ignorance is not bliss

Daily update

This week, the veil of ignorance shrouding the US economy is lifted a little—but only a little. US employment data (due Tuesday) was already low quality, and that is likely made worse by the effects of the government shutdown. Consumer price data (due Thursday) has been interpolating (or “guessing”) more and more, and has surveyed fewer prices in fewer locations this year.
These numbers need to be seen in the broader trends. Looking across a range of indicators, it does seem as if fear of unemployment remains low, allowing consumers to reduce savings in order to pay for the price increases that have emerged since April. This should continue into next year.
China’s November retail sales data were lackluster. There may be some distortions from earlier consumer spending campaigns, but even accounting for that, the data was poor. Consumers have not responded to policy stimulus very much. External demand is not too bad—exports excluding the US are doing well, although some of those exports may be exports to the US disguised to help US firms avoid tariffs.
Japan’s Tankan business sentiment survey is just a survey, but probably one that is taken more seriously than most by the respondents. The data showed reasonable optimism amongst Japanese manufacturers.