What economists do not know

Daily update

Today is the release of everything economists do not understand about the US economy—otherwise known as second quarter productivity. Productivity has assumed mythical status as people search for AI benefits. While technology should improve a company’s or sector’s productivity, its macro impact is less certain as people move into less productive jobs. Some productivity gains will not be counted—my robot lawnmower has substantially improved my productivity, but cutting my lawn was never part of GDP.
Economists might be more productive if they did not have to comment on every Gulf deal. The Iran-Oman agreement on the Strait of Hormuz at least has the advantage of trust between the parties. The oil price reaction is muted as reopening the Strait will require US concessions and trust between the US and Iran.
June Euro area retail sales are not market moving, but are a reminder that the European consumer is still willing to spend (though more spending will be directed to having fun in the midst of the European heatwave).
With US Federal Reserve Chair Warsh not communicating with the outside world, today’s other Fed speakers assume more importance as markets try to second guess what the Fed does next.