Falling Survey-Response Rates Undermine Economic Data

In recent months, markets have been laser-focused on every scrap of economic data for evidence on whether inflation is coming down or a recession is approaching. Unfortunately, that data suffers from a growing problem: reduced responses from the people whose activity it seeks to measure.

“There’s more data than there has ever been in the history of the world,” said Torsten Slok, the chief economist of Apollo Global Management Inc. “But the Fed has a dual mandate that’s called inflation and employment. That’s why financial markets spend the vast majority of their time on those two items.”