Inflation spreads

<p>Kia ora,</p><p>Welcome to Thursday’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 higher inflation is spreading everywhere.</p><p>But first, new housing starts in the US were unchanged in October from September, but a small rise was expected. That extends the 2021 tailing off that began in the second quarter, probably due to supply-chain issues mostly. However, building permits did rise in October after an unexpected drop in September.</p><p>This constrained supply is driving up US house prices. And now both their huge mortgage guarantors are having to back mortgages of <a href="https://singlefamily.fanniemae.com/originating-underwriting/loan-limits" target="_blank"><strong>sharply increased size</strong></a>.</p><p>The <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/211117/dq211117a-eng.htm?HPA=1" target="_blank"><strong>Canadian inflation rate</strong></a> in October came in at 4.7% as expected, but that is up from 4.4% in September. That's a 19 year high.</p><p>The <a href="https://www.reuters.com/world/americas/canada-province-mulls-state-emergency-after-floods-food-shortages-reported-2021-11-17/" target="_blank"><strong>flooding in British Columbia</strong></a> isn't easing and Vancouver is largely cut off; certainly its rail link is.</p><p>Data out yesterday for Japanese <a href="https://www.esri.cao.go.jp/en/stat/juchu/2021/2109juchu-e.html" target="_blank"><strong>machinery orders</strong></a> for September didn't rise from August and that wasn't expected - although it is probably due to supply-chain issues rather than demand. However, it is expected to recover over the next three months.</p><p><a href="https://www.customs.go.jp/toukei/shinbun/trade-st_e/2021/2021104e.pdf" target="_blank"><strong>Japan's exports</strong></a> for October were slightly softer than expected with their growth slowing, but again, probably due to manufactu