Resilience on Narrow Foundations

Four central banks decide policy this week, with an awkward message from the data: growth is holding up, but the sources of resilience are narrowing. In this week’s charts: → Factories are doing more of the lifting → Positive growth surprises are still outpacing inflation surprises → Stronger data had been pushing bond yields higher → Household disposable income growth weak or falling → US consumption leaning on equity wealth → Growth upgrades concentrated in chipmakers One capital spending cycle, one stock market and a falling saving rate. The expansion is real, but its dependence on asset values and financing conditions gives central banks reason to tread carefully before tightening further.