Raphael Stevens

What is mona lisa doing? At first glance the subject of the world’s most famous painting seems to be smiling. Look again and her smile fades. When it next reappears, it is a different sort of smile. Leonardo Da Vinci achieved this ambiguous effect with the use of sfumato, where he blurred the lines around Mona Lisa’s face. No matter how many times you look, you are unsure what is happening. The post-pandemic economy is like the Mona Lisa. Each time you look, you see something different. Following chaos in the banking industry many analysts are now convinced the world economy is heading for a “hard-landing” recession. Few seem to expect a “no-landing” scenario, in which the economy remains untroubled by rising interest rates—a fashionable opinion just weeks ago and one which itself supplanted a common view in late 2022 that a mild recession was certain. In short: forecasting has rarely been harder. In the past year the range of analysts’ expectations for American quarterly gdp growth has been twice as wide as in 2019. The word “uncertainty” appears more than 60 times in the imf’s latest global outlook, about twice as many as in the April and October 2022 versions. When the banking panic struck, no one had the slightest idea what the Federal Reserve would then do with interest rates in March—some investors expected a rate rise, some no change, some a cut—and the next few meetings look equally unpredictable. At the European Central Bank’s latest monetary-policy meeting last month, Christine Lagarde, its president, was blunt about her institution’s role. “It is not possible to determine at this point in time what the path will be going forward,” she said. Official statisticians are struggling to understand the picture. As a matter of course they update their estimates of everything from gdp to employment as more data come in. But something has changed. gdp revisions in the euro area are four times bigger than normal. In March Britain’s statistics office issued some huge revisions. The release showed real business investment was in line with its pre-pandemic level, not 8% below as once believed. Last month Australian statisticians more than halved their estimate of productivity growth in the third quarter of 2022. That year America’s Bureau of Labour Statistics (bls) issued revisions to its estimate of nonfarm payrolls (not adjusting for seasonality) of 59,000 a month between the first and third estimates, compared with 40,000 in 2019. What is going on? Perhaps the world is simply more volatile. In the past year Europe has seen its biggest land war in seven decades, supply-chain snarl-ups, an energy crisis and a period of banking turmoil. Yet there are also deeper, structural changes at play. The first relates to covid-19 disruptions. The world lurched from crashing to soaring growth as lockdowns came and went. This has played havoc with the “seasonal adjustments” common to most economic numbers. In February the bls changed the factors that it applies to inflation, which makes interpreting monthly rates much more difficult. Annualised core inflation in the final quarter of 2022 “increased” from 3.1% to 4.3%. It is also harder than normal to understand euro-zone inflation. Kamil Kovar of Moody’s Analytics, a consultancy, notes that depending on the seasonal adjustment, core month-on-month inflation in March was as low as 0.2% or as high as 0.4%. The second change relates to sample sizes. The pandemic accelerated a trend in which a growing share of people fail to respond to official surveys. In America the response rate for the survey used to estimate vacancies has fallen from nearly 60% just before the pandemic to around 30%. When covid struck, the response rate to Britain’s labour-force survey roughly halved. During lockdowns some businesses closed. And people fell out of the habit of filling in questionnaires. Distrust in government may also have grown, leaving people disinclined to help statisticians. Falling response rates probably increase data volatility. They may also lead to bias. The people who stopped responding to surveys appear less prosperous than those who continue to do so, misleadingly inflating income. Jonathan Rothbaum of the Census Bureau suggests that real median household income growth in America from 2019 to 2020 was 4.1%, not 6.8% as originally reported, after proper corrections for non-response. Since 2020 non-response has continued to push up income statistics by about 2%. A report by Omair Sharif of Inflation Insights, a consultancy, suggests that correcting for “non-response bias” may also have contributed to recent big revisions to American earnings data. The third reason for confusion stems from the disparity between “hard” and “soft” data—objective measures such as the level of unemployment, and subjective measures such as people’s future expectations. Normally the two types move in sync. Right now they are far apart. “Soft” measures look recessionary. “Hard” measures point to a decent expansion. The divergence may reflect people’s grumpiness with inflation. Prices in the rich world are still rising by 9% year on year.Investors and statisticians will get better at understanding the world economy during periods of volatility and inflation. As the effects of the pandemic fade, so will distortions to seasonal adjustments. Economists have already made progress in incorporating alternative data into forecasts, helping to overcome the problem of declining responses. But this is scant comfort for governments and businesses who need to make decisions right now—or for people just trying to keep up with the news. Do not be surprised if the global economy remains sfumata for a while yet. ■ More

What is mona lisa doing? At first glance the subject of the world’s most famous painting seems to be smiling. Look again and her smile fades. When it next reappears, it is a different sort of smile. Leonardo Da Vinci achieved this ambiguous effect with the use of sfumato, where he blurred the lines around Mona Lisa’s face. No matter how many times you look, you are unsure what is happening. The post-pandemic economy is like the Mona Lisa. Each time you look, you see something different. Following chaos in the banking industry many analysts are now convinced the world economy is heading for a “hard-landing” recession. Few seem to expect a “no-landing” scenario, in which the economy remains untroubled by rising interest rates—a fashionable opinion just weeks ago and one which itself supplanted a common view in late 2022 that a mild recession was certain. In short: forecasting has rarely been harder. In the past year the range of analysts’ expectations for American quarterly gdp growth has been twice as wide as in 2019. The word “uncertainty” appears more than 60 times in the imf’s latest global outlook, about twice as many as in the April and October 2022 versions. When the banking panic struck, no one had the slightest idea what the Federal Reserve would then do with interest rates in March—some investors expected a rate rise, some no change, some a cut—and the next few meetings look equally unpredictable. At the European Central Bank’s latest monetary-policy meeting last month, Christine Lagarde, its president, was blunt about her institution’s role. “It is not possible to determine at this point in time what the path will be going forward,” she said. Official statisticians are struggling to understand the picture. As a matter of course they update their estimates of everything from gdp to employment as more data come in. But something has changed. gdp revisions in the euro area are four times bigger than normal. In March Britain’s statistics office issued some huge revisions. The release showed real business investment was in line with its pre-pandemic level, not 8% below as once believed. Last month Australian statisticians more than halved their estimate of productivity growth in the third quarter of 2022. That year America’s Bureau of Labour Statistics (bls) issued revisions to its estimate of nonfarm payrolls (not adjusting for seasonality) of 59,000 a month between the first and third estimates, compared with 40,000 in 2019. What is going on? Perhaps the world is simply more volatile. In the past year Europe has seen its biggest land war in seven decades, supply-chain snarl-ups, an energy crisis and a period of banking turmoil. Yet there are also deeper, structural changes at play. The first relates to covid-19 disruptions. The world lurched from crashing to soaring growth as lockdowns came and went. This has played havoc with the “seasonal adjustments” common to most economic numbers. In February the bls changed the factors that it applies to inflation, which makes interpreting monthly rates much more difficult. Annualised core inflation in the final quarter of 2022 “increased” from 3.1% to 4.3%. It is also harder than normal to understand euro-zone inflation. Kamil Kovar of Moody’s Analytics, a consultancy, notes that depending on the seasonal adjustment, core month-on-month inflation in March was as low as 0.2% or as high as 0.4%. The second change relates to sample sizes. The pandemic accelerated a trend in which a growing share of people fail to respond to official surveys. In America the response rate for the survey used to estimate vacancies has fallen from nearly 60% just before the pandemic to around 30%. When covid struck, the response rate to Britain’s labour-force survey roughly halved. During lockdowns some businesses closed. And people fell out of the habit of filling in questionnaires. Distrust in government may also have grown, leaving people disinclined to help statisticians. Falling response rates probably increase data volatility. They may also lead to bias. The people who stopped responding to surveys appear less prosperous than those who continue to do so, misleadingly inflating income. Jonathan Rothbaum of the Census Bureau suggests that real median household income growth in America from 2019 to 2020 was 4.1%, not 6.8% as originally reported, after proper corrections for non-response. Since 2020 non-response has continued to push up income statistics by about 2%. A report by Omair Sharif of Inflation Insights, a consultancy, suggests that correcting for “non-response bias” may also have contributed to recent big revisions to American earnings data. The third reason for confusion stems from the disparity between “hard” and “soft” data—objective measures such as the level of unemployment, and subjective measures such as people’s future expectations. Normally the two types move in sync. Right now they are far apart. “Soft” measures look recessionary. “Hard” measures point to a decent expansion. The divergence may reflect people’s grumpiness with inflation. Prices in the rich world are still rising by 9% year on year.Investors and statisticians will get better at understanding the world economy during periods of volatility and inflation. As the effects of the pandemic fade, so will distortions to seasonal adjustments. Economists have already made progress in incorporating alternative data into forecasts, helping to overcome the problem of declining responses. But this is scant comfort for governments and businesses who need to make decisions right now—or for people just trying to keep up with the news. Do not be surprised if the global economy remains sfumata for a while yet. ■ More

Travel demand in 2023 has soared as Americans take trips they’d shelved earlier in the pandemic and as Covid travel restrictions ease.
Prices for hotel rooms and international airline tickets have risen sharply.
Being flexible and booking early are among the best ways to save money, travel experts said.

D3sign | Moment | Getty Images

Some aspects of travel are pricier than ever amid pent-up demand.
“The big cities and the popular [international] destinations — Paris, Rome, Madrid, Lisbon, Milan — those are off the charts,” Sofia Markovich, a travel advisor and founder of Sofia’s Travel, said of trip cost. “I look at this every day and I’m just shaking my head like, wow.”

But fear not: There are ways for price-conscious travelers to satiate their wanderlust without breaking the bank.
“People should be prepared not just for a busy travel season, but an expensive travel season,” said Sally French, a travel expert at NerdWallet. “The good news is: There’s hope.”
Often, scoring the best deal may mean staying flexible and planning well ahead of time, experts said. Here’s what you need to know about the current market, and how to save.
More from Personal Finance:This is the ‘best defense’ against inflation, says financial advisorEgg prices crashed 11% in March — and more relief may followHere’s the inflation breakdown for March 2023 — in one chart

International travel costs have hit record highs

The Eiffel Tower and Seine River at sunrise in Paris.
Alexander Spatari | Moment | Getty Images

Consumers are traveling again after a few years of shelving plans during the pandemic. That pent-up demand has been reinforced by an easing of pandemic-era travel restrictions around the world.

On average, American travelers expect to take 3.5 leisure trips in the next 12 months, up from 2.9 a year ago, according to a recent poll by Destination Analysts, a tourism market research firm.
The so-called “revenge travel” dynamic has helped to push up prices, perhaps most acutely for travel abroad.
For example, a round-trip airline ticket to Europe is now about $1,000 — 20% more expensive relative to this time in 2019 and 32% more costly than last year, said Hayley Berg, lead economist at Hopper, a travel app. A round-trip flight to Asia costs $1,600 — about 60% pricier than a 2019 ticket, she said.
These are record high prices, Berg said. It’s an especially notable shift considering that prices had generally been falling for international travel before the pandemic.

People should be prepared not just for a busy travel season, but an expensive travel season.

Sally French
travel expert at NerdWallet

This summer is expected to be the busiest on record for international travel, the U.S. State Department said in March. More than half of Americans’ search demand is for international destinations, the most since 2019, with Asia and Europe being the most sought-after locales, according to Hopper data.
The U.S. dollar has also weakened in recent months relative to major currencies such as the euro, making it more expensive to travel to certain areas.

Domestic flights, rental cars have fallen from their peak

Alistair Berg | Digitalvision | Getty Images

Overall, travel costs are up 9% in the past year and 20% versus 2019, according to a NerdWallet analysis.
The analysis — which includes airfare, hotels, rental cars, dining out and entertainment — compiles data in the most recent consumer price index, issued Wednesday by the U.S. Bureau of Labor Statistics.
Hotel room rates were at record highs in March, said French, of NerdWallet. Nightly rates are up 3% from February and 8% in the past year, according to CPI data.
In dollar terms, the average person is paying about $100 a night for a U.S. hotel room today, according to Hopper data. Rates are especially high in popular leisure-travel destinations such as Los Angeles and New York, where nightly rates are up 30% and 17%, respectively, from last year, Berg said.
Inflation in the broad U.S. economy is falling gradually but remains high.

Those general inflationary pressures feed into higher costs across the travel chain, Berg said. For example, higher worker wages, property costs, higher interest payments for businesses, even the little shampoo bottles in a hotel room or pretzels on an airplane are passed on to consumers to some degree, she said.
Not all aspects of travel are necessarily at record levels, though.
Domestic airfare costs $281, on average, today — 12% lower than this time last year and about flat with 2019, Berg said. Prices had soared to record highs in 2022 amid high demand and operational issues among airlines.
Renting a car is also about 9% less costly than it was a year ago, according to CPI data. Rental cars had been “one of the biggest stories” of pandemic-era travel, French said; costs soared as Americans took more road trips and a semiconductor shortage drove up car prices.

How to score a good deal on travel

Thomas Barwick | Digitalvision | Getty Images

Here are some of the top ways Americans may be able to reduce the overall cost of a trip, according to travel experts.
1. Be flexible with trip timing and location
Being flexible with your plans is one of the major ways to save money, travel experts said.
That flexibility can take many forms. For example, instead of Paris, perhaps consider a different city or region of France, said Markovich, the travel advisor. Going to Normandy might cost a traveler half what Paris would, she said.
Or, weigh a trip to another area of Europe, such as Scandinavia, which is “very underrated, beautiful and has a lot to offer — history, culture, culinary experiences and so on,” she said.
These general principles apply across the globe. They may also yield an equally or even more rewarding experience, especially if your initially desired destination is overcrowded, Markovich said.
“I like to suggest to clients to perhaps look at different options,” Markovich said. “Paris and Rome aren’t going away. They will be there [later].”

Sunset in northern Norway.
© Marco Bottigelli | Moment | Getty Images

Being flexible on travel day and time of year can also make a big financial difference, French said. That might mean traveling during a shoulder season instead of high season for a particular area, or adjusting the days during which you’re traveling.
Instead of traveling on a Friday or Sunday — which tend to be the highest-volume days — midweek is generally lighter-trafficked and less expensive for airfare, she said.
Price “is more about the day you’re traveling, not the day you’re buying the ticket,” French said. “Even adjusting by a few days can make a big difference.”
A service such as Google Flights can help travelers compare dates and prices and see how ticket costs compare with a historical average, French said.
Sometimes, if you’re planning to book a multileg flight — especially to Europe — you may instead be able to substitute a short train ride for a layover and save some cash, Markovich said. For example, instead of flying from the U.S. to Paris and then on to Geneva, you can fly to Paris and then take a train to Geneva, she said.
2. Book early
Your options and pricing are often better when you plann ahead instead of waiting until the last minute, experts said.
For example, the typical sweet spot for lower-cost international airfare is buying three to five months out from a trip, Berg said.
“For summer, if you’re traveling internationally, you should really be booking right now,” Berg said.
For domestic flights, the window is a bit shorter. Book by the end of April if you’re traveling in June or July, and sometime by the first or second week of May if you’re traveling in August, Berg said.

I like to suggest to clients to perhaps look at different options. Paris and Rome aren’t going away.

Sofia Markovich
travel advisor and founder of Sofia’s Travel

The one exception to buying well ahead: Big cities, such as Chicago, London and New York, which have ample hotels competing for business, Berg said. In these locales, hotel operators often discount rooms at the last minute; travelers who can be flexible on neighborhood and type of room might save as much as 25%, Berg said.
One note of caution: That wait-it-out strategy may not work well in resorts or popular leisure destinations such as Miami, Orlando (i.e., Walt Disney World Resort) or Nice, France, that may not have a huge supply of available hotel rooms, she added.
3. Use your travel card benefits
Certain credit cards — especially ones geared toward travelers — carry benefits that might help you save. The caveat: You must use the card to fund your purchase.
Some cards waive international transaction fees, generally around 3% per transaction, for charges abroad. Some have travel insurance benefits for trip delays or lost baggage. Others might carry rental car perks such as auto insurance collision coverage.
Further, for travelers who have credit card points and miles, “this is definitely the best year to spend them,” French said. The points are generally more valuable — they can buy you more — right now because many travel operators such as hotels haven’t yet reset their rewards programs to reflect current prices; they take some time to catch up, French said. More

People walk near the Google offices on July 04, 2022 in New York City.
John Smith | View Press | Getty Images

Check out the companies making headlines in midday trading.
State Street, M&T Bank – Shares of State Street dropped 11% after the company posted disappointing earnings and revenue. State Street posted earnings of $1.52 per share on revenue of $3.10 billion, while analysts called for per-share earnings of $1.64 and revenue of $3.12 billion, according to Refinitiv. Meanwhile, M&T Bank shares popped 5% higher after the bank reported beats on the top and bottom lines. Bank of New York Mellon, set to post results on Tuesday, slipped 5%.

Enphase Energy, First Solar, SolarEdge Technologies – Solar energy stocks climbed across the board, with Enphase leading the charge with a 7.2% gain, while First Solar and SolarEdge added 5.4% and 4.3% respectively. Piper Sandler upgraded Enphase Energy earlier on Monday from neutral to overweight, citing possible 40% top line growth this year.
Netflix — Shares of the streaming giant dipped more than 2%. The streaming giant is set to post its latest quarterly results Tuesday after the bell. Credit Suisse reiterated its neutral rating on Netflix on Monday, saying it’s cautious ahead of its earnings.
Alphabet – Shares of the Google parent slid 3% after The New York Times reported that Samsung is considering ditching Google as the default search engine on its smartphones in favor of Microsoft’s Bing. The report, citing internal messages, said Alphabet was spooked upon learning about the discussions in March, and that about $3 billion in annual revenue is at stake.
Charles Schwab — Shares of Charles Schwab rose about 2.5% after the brokerage firm posted better-than-expected earnings on Monday. Schwab posted adjusted earnings of 93 cents per share, beating analysts’ forecast of 90 cents per share, according to Refinitiv. The company’s revenue of $5.12 billion fell slightly short of analysts’ estimates. Schwab has faced pressure since the collapse of Silicon Valley Bank. Schwab, however, has defended its financial position, noting its loan-to-deposit ratio is low.
Prometheus Biosciences – Shares of Prometheus Biosciences leapt nearly 70%. The action comes a day after Merck said it would purchase Prometheus for about $10.8 billion. Prometheus is developing a treatment for ulcerative colitis, Crohn’s disease and other autoimmune conditions. Merck shares were roughly flat.

Roblox— The gaming company continued a sharp decline into midday trading, with a loss of 11%. Roblox’s March metrics report disclosed the company expects average bookings per daily user, which is how it refers to revenue, to fall year over year.
Moderna — Shares of the vaccine maker were 7% lower on Monday. The action follows an encouraging report a day earlier that showed early trial results from a vaccine that used Merck’s immunotherapy Keytruda slashed the recurrence of deadly skin cancer melanoma.
Lumentum — The light and laser company advanced 3.4% after JPMorgan upgraded the stock to overweight. The firm said the current valuation could be pricing in “more headwinds than realistic” despite near-term demand challenges.
Okta — The cloud software firm climbed 3.8% Monday, after UBS initiated coverage of the company with a buy rating and highlighted the potential benefit of “continued identity tailwinds.”
— CNBC’s Tanaya Macheel, Yun Li, Alex Harring, Pia Singh and Sarah Min contributed reporting More