Sorting Out Conflicting Economic Reporting and Polling Data

Consistently projecting market behavior requires reconciling conflicting economic reporting, and public sentiment, with market performance/economic strength. The table below highlights recent and significant reporting conflicts.

One explanation for GDP decreasing when earnings increase is an increase in import purchases. This explanation squares with increasing trade deficits. However is a monthly spread increase of $1-3B in import purchases enough to have such a significant impact on GDP (6.6% drop from Q2 to Q3 2017; 19% from Q2 to Q3 in 2018; and 35% from Q3 to Q4 2018)? Note Q1 2019 GDP (3.1%) increases 40% over Q4 2018 GDP (2.2%), while Q1 earnings only increase by 16.42% v Q4 increase of 20.49%. Should these inconsistencies be considered to assess if GDP reporting is being manipulated to construct False Narratives?

Early presidential polling for 2020 is running against the incumbent, and consistent with historical polling data. However, it conflicts with economic strength, historically low unemployment, social justice improvement evidenced by prison reform, energy independence, reduction in U.S. foreign conflict, and significant restructuring of trade agreements with Mexico, Canada, Japan, South Korea, Vietnam, and China needs to be reconciled.

International political sentiment needs to be considered as well. With the exception of Mexico, clear and consistent movement away from left (Socialist)  to center right (Nationalist/Populist) is evidenced by Brexit Vote in U.K., preceding the 2016 U.S. center right Presidential Election outcome. Center right victories have extended into Australia, Brazil, Italy, Hungry, Poland, and most recently Greece.

LePen and the Yellow Vests neutering Macron. Prime Minister May forced to resign and the rise of the Brexit Party to dominate EU Parliament Elections; and Prime Minister Trudeau’s Liberal Party trailing the Conservative Party of Canada reinforce sentiment shift to right of center.

You would expect reporting by the smart folks in aligned media, to be a little more cognizant of the discrepancies illustrated. Unless they are too busy constructing and executing False Narratives to notice.

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