Labor weakness still beats inflation increases

Daily update

Federal Reserve Chair Powell reiterated that labor market concerns dominate inflation concerns in current policy. The lack of a functioning US federal government means this economic analysis depends on dubious quality data—private sector polls and potentially distorted anecdotal evidence—but Powell has shown a willingness to depend on such data in making past policy decisions.
China’s September consumer and producer price data remain deflationary, and marginally weaker than anticipated. Neither set of numbers has much direct relevance for the rest of the world, but the persistence of deflation hints at the subdued state of China’s domestic demand.
This week’s French government survived another day, with the current prime minister delaying planned pension reforms until after the 2027 presidential election (adding to the fiscal deficit). This, it is hoped, will bring political stability in the form of Socialist Party support at Thursday’s no confidence motions. The price will be less fiscal stability.
Final French and Spanish consumer price data for September will interest no one. The US Empire State poll of manufacturing sentiment is due, and such is the extent of the data drought that journalists and economists are likely to fall upon it with the enthusiasm of ravenous wolves. That enthusiasm does not improve the data quality.