Commodity supercharge rolls on

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news that although the Russia-Ukraine headlines dominate the general news, the global economy is continuing its recovery, one which is supercharging commodity demand.</p><p>Last week's American <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20220280.pdf" target="_blank"><strong>jobless claims rose</strong></a> marginally to 238,000 for the 7 days, taking the total number of people on these benefits to 1.975 mln and below pre-pandemic levels because more people found jobs or their benefits expired. The seasonally-adjusted level is near an all-time low.</p><p>Labour shortages, cold weather and timber shortages have all meant that US <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>housing starts fell</strong></a> in January, and that was not expected. But building permits rose and to their highest level since 2004. They want to build but supply chain issues are holding them back.</p><p>The Philly Fed's wide-watched <a href="https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/mbos/2022/bos0222.pdf?la=en&hash=4A1D6640B49DF84794D2EFFB56FBFF8F" target="_blank"><strong>factory survey</strong></a> in the powerhouse Pennsylvania manufacturing heartland suggests the same supply-chain issues. Strong order levels eased a bit, but labour availability remains very tight. These firms now report that they are successfully passing on the higher costs they face.</p><p>And we should note that although its growth has flattened out over the past month, the <a href="https://fred.stlouisfed.org/series/WALCL" target="_blank"><strong>US Fed's balance sheet</strong></a> is still inching up, now almost at US$8.9 tln, essentially built up over the past two years to be 37% of annual <a href="https://fred.stlouisfed.o