- Factory inventories strengthen.
- Retail & wholesale sales improve.
- I/S ratios ease m/m, but remain elevated.
USA| Jun 16 2023U.S. Business Inventories Rebound in April; Sales Rise
by:Tom Moeller
|in:Economy in Brief
Global| Jun 16 2023Charts of the Week (June 16, 2023)
Central banks have stolen the limelight over the past few days but with policy shifts that reveal stark differences – and perhaps greater disagreement among policymakers - about the outlook for their respective economies. For example, the decision by the US Federal Reserve to pause its tightening campaign, while simultaneously hinting at future rate hikes in the coming months, undoubtedly raised a few eyebrows. Meanwhile, China's decision this week to reduce its 7-day reverse repo rate by 10bps, lowering it from 2% to 1.9%, was also noteworthy but not entirely surprising given a series of disappointing data releases. As for the ECB, this week’s decision to lift its key policy rates by a further 25bps came as no surprise even though the incoming growth data from the euro area have been equally underwhelming (compared with China). Against this backdrop, our charts this week focus on the Fed’s tightening campaign (in chart 1), the recent strength of global equity markets (in chart 2), and US and broader global inflation issues (in charts 3 and 4). We then turn to the growing inflexibility of the UK labour market (in chart 5) and finally focus on China’s disappointing reopening phase (in chart 6).
by:Andrew Cates
|in:Economy in Brief
USA| Jun 15 2023U.S. Retail Sales Are Unexpectedly Firm in May
- Motor vehicle & building material sales strengthen.
- Core goods increase moderates.
- Lower gasoline prices continue to lessen overall gain.
by:Tom Moeller
|in:Economy in Brief
USA| Jun 15 2023U.S. Industrial Production Slows in May after Sizable April Gain
- Overall industrial production down 0.2%.
- Manufacturing output increases slightly after April’s big gain.
- Total capacity utilization edges down, but holds steady in manufacturing.
USA| Jun 15 2023U.S. Import and Export Prices Decline
- Import price decline led by large drop in fuel prices.
- Excluding fuels, import prices decline minimally.
- Export prices fall sharply.
by:Tom Moeller
|in:Economy in Brief
- Jobless claims remain at highest since October 2021.
- Continuing claims hold prior week’s modestly smaller amount.
- Insured unemployment rate unchanged, remains low for 7th straight week.
Japan| Jun 15 2023Japan’s Trade Deficit Shrinks While Exports and Imports Both Contract
Japan's trade report posted sobering trends in May as Japan's deficit shrank from April, continuing a round of improvement as the trade deficit has improved in six of the last seven months.
Japan's trade flows tell a story of weakening global economic growth as well as of weakening growth in Japan. Japan's nominal export growth has declined over 12 months, 6 months, and 3 months. Imports also show declines over 12 months, 6 months, and 3 months. In neither case, is the nominal decline sequentially worsening, although in both cases the 6-month and 3-month pace of decline is at a greater rate than the 12-month decline.
Trade flows are contracting Real exports and real imports both fell in May, with exports falling by 4.6% and imports falling by 7.3%. Looking back at sequential trends of real exports, as for the nominal flows, there are declines over 12 months, over 6 months, and over 3 months. Once again, the declines over 3 months and 6 months are both greater than the pace of the decline over 12 months. This indicates a general deterioration in the pace of trade flow growth, but there is not a clear-cut monotonic decline in the growth rates. For imports, there are also negative growth rates over 12 months, over 6 months, and over 3 months. And - like for the nominal counterparts, and as in the case of exports as well - there's no clear-cut sequential trend deceleration in progress although over 6 months and 3 months the declines in growth rates are at a greater pace than the decline over 12 months.
Growth is slowing... These general trends indicate that global growth is weakening because Japanese export volumes are weakening. Import volume weakness suggests that Japan's domestic economy is weakening as well. Japan's nominal import declines show greater weakness than real declines because import prices are weakening faster, largely because of weakness in oil prices.
The yen is weakening In this environment, the yen has slipped against the dollar falling by 6.4% over 12 months, rebounding slightly to rise on balance over 6 months, then falling by 12.6% over 3 months. The real broad yen index, an index of the yen expressed in real terms and against a broad basket of currencies, mirrors the movement in the nominal yen against the dollar. This real, broad-based, measure is lower by 4.2% over 12 months, has a slight rebound over 6 months, then falls at a 6.9% annual rate over 3 months.
USA| Jun 14 2023FOMC Leaves Fed Funds Rate Unchanged
- Federal funds rate is unchanged in a range of 5.00% to 5.25%.
- Rate is highest since August 2007.
- Economic projections add to real growth & inflation this year.
by:Tom Moeller
|in:Economy in Brief
- of2693Go to 286 page