Home Economics Spread Between “Hard” and “Soft” Data at 17-Year High

Spread Between “Hard” and “Soft” Data at 17-Year High

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Bloomberg’s Matthew Boesler (@boes_) just tweeted out the following chart showing that the spread between “hard data” and “soft data” surprises is now the widest is it’s been in 17 years.

What does this mean and why is this important? It tells us that business and consumer optimism has run very far ahead of the economic fundamentals

The spread or difference between the two is listed in red, “hard data” in blue, and “soft data” in orange.

hard vs soft data
Source: @boes_

One thing we should point out in looking at this graph is that “soft data” surveys appear to much more volatile than actual “hard data” since surveys, of course, are a representation of business and consumer psychology vs. slower moving economic trends. Given that the spread between the two is currently at its widest as far as the data goes back, i.e. 17 years, we should expect a “reality check” to take place.

According to Ralph Acampora, who will be speaking on our Financial Sense Newshour podcast this Saturday, after being elected, new presidents tend to see a 6-month honeymoon period on average before economic realities resurface and the euphoria wears off. In that case, Ralph asserts, the animal spirits driving the current Trump rally may start to wane in another month or two.

Given the very wide divergence between reality and perceptions currently, investors may be set up for a big disappointment should Trump fail to implement many of his pro-growth policies quickly.

Become a subscriber and gain full access to our premium weekday interviews with leading guest experts by clicking here.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.


Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.