Bond market stops fighting the Fed

<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>And today we lead with news bond interest rates pushed higher overnight on a backdrop of stubborn inflation signals.</p><p>But first, last week American <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20230425.pdf" target="_blank"><strong>jobless claims</strong></a> slipped slightly to +201,000 and taking the total number of people on this support to just under 1.9 mln. A rise was expected. So far, this leading indicator isn't showing any changed labour market stress. It has been widely expected for months but just hasn't surfaced yet.</p><p>Meanwhile, <a href="https://www.bls.gov/news.release/prod2.nr0.htm" target="_blank"><strong>American labour productivity is rising</strong></a>. Output rose +3.1% while hours worked rose +1.4%, giving a boost to a key economic metric. However, this is Q4-2022 data so a little dated.</p><p>US <a href="https://www.nada.org/media/7299/download?inline" target="_blank"><strong>car sales</strong></a> ran at a 15.7 mln annual rate in January, a fifth straight month of increase. Easing supply chain pressures are getting the credit as manufacturers are able to deliver more. The US is the world's second largest car market, well behind the expanding Chinese market.</p><p>Across the Pacific, there was again no useful data released by Chinese authorities. But a <a href="https://www.amchamchina.org/2023-china-business-climate-survey-report/" target="_blank"><strong>survey</strong></a> by the Shanghai-based American Chamber of Commerce in China, found that most members plan to stay engaged, but worryingly a quarter said they had started disengaging in some way, up from 14% a year ago.</p><p>In Hong Kong <a href="https://www.censtatd.gov.hk/en/press_release_detail.html?id=5205" target="_blank"><strong>retail sales bounced back strongly in January<