Getting it wrong – UBS
|The US will be revising last year’s non-farm payrolls data. Markets have a heightened interest in the labor market, and these revisions are likely to be negative. However, this does not change anything about the economy. Making payrolls marginally less inaccurate is about spin, not substance. Consumers have been spending this year based on the labor market they experience, not the labour market that was reported, UBS macro analyst Paul Donovan notes.
Buoyant tax revenues suggest better economic growth
“The Federal Reserve minutes are due—with investors presuming that the period of policy error is about to end in September, with a rate cut. The Fed is late in cutting rates, but the relative stability of real borrowing rates means it is not a catastrophic error. The revisions to labor market data do emphasize the risks around Fed Chair Powell’s ‘data dependency’ approach.”
“Early August export data from South Korea showed ongoing strength in semiconductor exports. However, this is probably more about the hype around artificial intelligence than any strong signal about global consumer demand for goods.”
“UK fiscal data showed strength in tax revenues (which the government was quick to spend). Tax revenue data matters because as structural change accelerates, traditional economic statistics may miss economic activity. Tax collectors rarely miss anything, so buoyant tax revenues suggest better economic growth.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.