Six Takeaways to Cut Through Noisy Economic Data
Over the last several years I have been focused on noise in economic data, how it is reported in the media and the risk of drawing the wrong conclusions when it comes to business planning and strategy.
During the current Trump administration, the data has been extraordinarily difficult to read. Whether by design or the unplanned outcome of chaotic decision-making, the numbers and coverage of it present a decidedly mixed and often counterintuitive picture of the economy.
Despite expectations in many quarters of a recession, although far from the promised second Guided Age, the economy appears to be resilient. But, for all the data we are seeing, context matters. For much of 2025, for example, companies and consumers have been buying ahead of expected tariffs or the expiration of subsidies (electric vehicles/solar). Underscoring the contradictory signals, there has been a significant decline in consumer confidence, yet Black Friday online sales rose 9% over 2024.
Although tariffs have contributed to inflation, increases in the consumer price index have been relatively modest to date – a positive. But this also reflects the inability of companies to pass on costs in an increasingly price-conscious landscape – a negative.
One key indicator of economic health has been flashing red for some time – jobs data. The reduction in hiring over the last year and edging up of unemployment is significant. Even here the data is noisy with the Trump Administration’s focus on the deportation of immigrants impacting the numbers.
Having lived through Black Monday in 1987, the Asian Financial Crisis, the dot-com bubble bursting in 2000, Japan’s lost decade, the global financial crisis of 2007 and COVID, here are six takeaways as a yardstick for thinking about where we are headed and making decisions based on it .
The economy and the economy we experience may be very different: The adage that a recession is when someone else loses their job and a depression is when I lose mine, reflects the ways in which economic downturns impact people differently. In the early 2000s I lived in Tokyo, where the economy felt like it was booming. But a short train ride out of the city revealed a very different experience for those in towns that were being hollowed out. In the Great Depression the highest unemployment rate was 25%. Although most people were working, it was a devastating event for millions of Americans.
Economies are more resilient than we think: When Britain voted for Brexit, the cataclysmic predictions for the economy did not materialize. London remained a financial center; the economy muddled along. The impact of tariffs has not driven the U.S. economy or consumer spending off a cliff. Economies may suffer, but they do adapt.
The impact of a struggling or growing economy is felt at the margins: Most companies and Americans live or die on their margins, so small changes can have a large impact. If you employ 100 people and are facing costs that are 3% higher, cutting people at the margins will have an outsized impact on those whose jobs are eliminated.
All that glitters is not gold: Lower prices for services may be the result of government policies, healthy competition or a recessionary environment in which the only way to sell is to make things cheaper. Higher prices may reflect inflation, limited supply or tariffs. The point is what may appear to be good (or bad) economic news may be the opposite. We need to look beyond the headlines and the Panglossian pronouncements from Washington.
In upturns and downturns some companies do well, others will get by or go out of business: The Warren Buffet quote, “It's only when the tide goes out that you discover who's been swimming naked” is an after-the-fact way to evaluate companies’ finances. It is when the tide is high or starting to recede that business leaders need to be thinking about services provided in the context of their clients’ hierarchy of needs. Markets will change. Some will adapt, others will not.
Data looks back, leaders look forward: Economic data is a window into the past for making forward-looking decisions. The machinations of the Federal Reserve underscores just how difficult this is right now. Great work, understanding the competitive and economic landscape, ongoing discussions with clients about their needs, and heading where puck is going to be, not where it has been, are keys to successful planning.
It’s clear that 2025 has been challenging for many, but consistent with these takeaways the economy has not dropped off a cliff. Based on current evidence it’s realistic to plan for 2026 with a similar outcome in mind.
Some agencies and communications departments will grow along with their clients and companies. Others will struggle and lay off communicators. It will be at the margins that a clearer directional picture will emerge for the industry, the overall economy, and our individual experiences of it.
