It’s been another eventful week and one that serves to remind us that while there may be more sources of optimism this year, compared with last, it’s going to be a very bumpy ride.
There’s no doubt that there’s been plenty more cause for optimism so far this year, especially compared with what we became accustomed to in 2022. The US could have the soft landing many had doubted was possible. China could rebound strongly from the lifting of Covid restrictions. And the euro area could avoid a crisis.
That’s not a bad shift in expectations at all. However, as quickly as the data became more favorable, they could turn around again. The US economic data this week was far less encouraging. Rather than focus on disinflation and the labour market, it’s been other economic indicators and earnings that have taken the spotlight and it hasn’t been great.
What’s more, it seems we’re seeing more regular warnings of imminent layoffs, the latest coming from Alphabet which plans to cut 12,000 staff globally. Companies have been reluctant to let staff go after the post-pandemic rehiring difficulties. But the tide seems to be turning. The economic data could…