Goldilocks, or not?

Macro Pulse · Aug 11, 2023 · 4m

Financial markets have continued to gravitate toward the ‘Goldilocks’ scenario where economic growth is neither “too hot” nor “too cold” and where inflation gradually moderates to more target-friendly levels. But while that view may have appeared overly optimistic a few weeks ago, much of the incoming data more recently appears to support this narrative. In our charts this week we focus on:

· Upbeat GDP data for Q2

· The messaging from August’s sentix surveys

· Ebbing US unit labour cost pressures

· Target-friendly inflation outcomes

· Inflation expectations and oil prices

· China’s soggy…