Daily Commentary

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.

MarketMinder’s View: News you can use, we guess, but it also falls under the don’t get your hopes up header. Because while the US Court of International Trade did direct the US Treasury to refund duties collected under tariffs the Supreme Court struck down last month, the Trump administration will likely appeal, extending the legal process. Beyond that, the presiding judge “explained at the outset of his hearing Wednesday that it can take 314 days before the initial duties paid on an imported good are finalized, and that there is a 90-day grace period to give refunds.” And even then, you might remain out of pocket unless you bought directly from an overseas retailer and paid tariffs through one of the major international shipping carriers’ portals. “None of the litigation playing out in the Court of International Trade—or the higher courts—has delved into the prospect of refunds for consumers who paid higher prices because of tariffs. Until the question of refunds to companies is sorted out and money is securely in their hands, it is unlikely that businesses will make a final decision on how to handle the matter.” Broad customer refunds would be surprising, given the costly administrative nightmare that would be for retailers, to the extent it is even possible. We view the court ruling primarily as an example of falling uncertainty, not a potential consumer windfall.

MarketMinder’s View: US retail sales fell -0.2% m/m in January (December was flat), but the detractors weren’t new or troubling: auto sales, which have been volatile for eons, and gasoline, which fell as prices dropped (the retail sales report isn’t inflation-adjusted). Excluding those categories, sales rose 0.3% m/m, with online sales leading the charge as blizzards kept people indoors. The broad reaction, which this article captures, is that the report was better than headline figures suggested, but any strength will likely be short-lived as the war in Iran lifts gas prices. Perhaps crude oil does stay high and lift prices at the pump, but that isn’t the be all, end all for retail sales or broader consumer spending. The US economy has weathered plenty of stretches of high gas prices without falling into a recession, and spending on gas is still spending. The potential for positive surprise here looks high.