Central banks will like today's tame data

<p>Kia ora,</p><p>Welcome to Wednesday’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 central banks may be increasingly happy with the tame data released today.</p><p>But first, today's <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> was a lame affair. Analysts had expected prices to rise +1.9% but in the event they fell -1.0%. Buyer demand is soft even as indications grow that the global milk supply may start falling. Nine of the past twelve dairy auctions have delivered price falls. Making them slightly worse in that prices fell -2.2% in NZD. The big loser today was the cheddar price - again, down a massive -10%. This is its lowest since December 2020 and is down a massive -39% since its peak in April 2022. That probably says a lot about China's foodservice industry. On its own this auction won't be changing farmgate milk payout prices, but it is adding to downside pressure.</p><p>Meanwhile <a href="https://www.census.gov/retail/marts/www/marts_current.pdf" target="_blank"><strong>American retail sales</strong></a> rose less than expected in June to be up +1.5% above year-ago levels. That obviously isn't more than inflation so they are dragging worryingly. Holding them up was another modest advance in car sales.</p><p>The US <a href="https://www.redbookresearch.com/" target="_blank"><strong>Redbook retail sales</strong></a> tracking of general merchandise (on a same-store basis) fell last week from the same week a year ago, and at -0.2% this is entirely consistent with the official stats. It is likely that the Fed officials will find this lower retail impulse "just what the doctor ordered' and be happy it is quelling inflation.</p><p>Also retreating is American <a href="https://www.federalreserve.gov/releases/g17/current/default.htm" target="_blank"><strong>industrial production</s