Daily Commentary

MarketMinder’s View: Despite the dour title, some of the UK economic data discussed here actually point positively. First, the negatives: Yes, the two monthly employment measures featured here weakened. “A monthly employment index from BDO, an accountancy and consultancy firm, is running at its weakest level in nearly 15 years. It has had its worst reading since March 2011, when the jobs market was still recovering from the financial crash.” The other (from KPMG and the Recruitment and Employment Confederation) indicated demand for workers weakened in February, though there were some signs of stabilization. These datasets are consistent with the Office for National Statistics’ data and Office for Budget Responsibility’s report, which found businesses were holding back on hiring rather than laying off folks. So, Britain’s labor market isn’t gangbusters by any means, which tracks with other ok macroeconomic data. Interestingly, though, BDO also reported its business output index hit its highest level in a year, thanks to a “more buoyant services sector.” Yet that positive gets excused away with fretting over a “floundering labour market” (which lags growth) and global headwinds (e.g., the Middle East conflict). That is a lot of pessimism overshadowing some nicely positive data—yet another sign sentiment toward the UK is in the doldrums, teeing up positive surprise. A bullish sign for an economy that is in much better shape than many appreciate.

MarketMinder’s View: German heavy industry started 2026 on a lousy note as January industrial production slipped -0.5% m/m while manufacturing new orders fell -11.0%, with both missing analysts’ expectations and the former ending a four-month growth streak. The article worries January’s pullback reflects the petering out of government spending and investment, implying industrial production will remain weak without Berlin’s help—especially if higher energy prices tied to the conflict in Iran persist, thereby weighing on Germany’s energy-intensive industries. Perhaps, but that reads a lot into one month of data, which isn’t even as poor as the headline reading suggests (excluding more volatile large scale orders, industrial orders fell -0.4% m/m in January). We agree government investment takes time to roll out, which is why we caution investors against anticipating a big output boost—not that Germany needs it, given its private sector (and services in particular) drive the country’s growth. For stocks, though, this is all ancient news, which they have long since priced in. More recent (though still backward-looking) data show German manufacturing returned to growth mode in February—a reminder to review a swath of data when assessing economic conditions and how they align with reality.

MarketMinder’s View: As the article notes, official US employment data have endured big data revisions, raising questions and confusion—and political brushback. This article does a good job putting all of this in context and defanging fears of politicized numbers from both sides. While the current administration fired the Bureau of Labor Statistics (BLS) head and alleged the agency rigged the numbers against it, “economists almost universally rejected those accusations, noting that there was no political pattern to the agency’s numbers and that there had been similar negative revisions under President Joseph R. Biden Jr.” Then, when people feared the Trump administration would interfere to tilt the numbers in its favor under new leadership, “there is no evidence of that happening, either. Current and former staffers say that the agency is using the same procedures as under past administrations, and that it would be impossible for the White House to interfere in its operations without detection.” The boring truth is that revisions have always happened, sometimes big ones. And of late, declining survey response rates have forced the BLS’s models to do more of the heavy lifting, and those models have had a hard time accounting for business creation and failure after the COVID-induced surge in entrepreneurship and failures. The UK has been dealing with similar problems, and these things can take a while to sort out. The upshot for investors: Data are always fuzzy, and it also doesn’t really matter since jobs data in particular and late-lagging indicators.