Revising history

07 Feb 2025 2 min read

Daily update

Today witnesses the extreme hype of US employment data. Today鈥檚 data also has annual benchmark revisions, which will confuse the headlines. Weirdly, the US Bureau of Labor Statistics has cancelled all briefings explaining data. This is not necessarily helpful as data becomes more complex, inaccurate, and misunderstood. It has also fueled disquiet that the new US administration might politicize the way data is calculated (survey responses are already partisan).
Investors often run models comparing economic data to market reactions (rightly so鈥攅conomics is central to everything and economists should be revered). However, these models tend to use post-revision data, when markets react to first-releases. Today鈥檚 benchmark revisions are likely to be large; large revisions remind investors of the inaccuracy of comparing revised data to real time market moves.
German December exports were stronger than expected (imports too鈥攖he German consumer is quietly spending money). This may be politically sensitive. Weak auto production undermined industrial production data.
The US Michigan consumer sentiment data is mainly of use as a reminder of just how much survey polls are distorted by political bias. However, fear (free from partisanship) is something to monitor. Low fear of the future has kept consumers spending. If fear and uncertainty rise, the soft economic landing is vulnerable.