China's exports plunge, threatening recovery

<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 that China's recovery has stalled, and that is affected many trading partners linked closely to it.</p><p>But first, <a href="https://www.moodys.com/research/Banks-US-Funding-risks-weaker-profitability-and-turn-in-asset-Sector-In-Depth--PBC_1374660" target="_blank"><strong>Moody's has cut the credit ratings</strong></a> of ten mid-sized American banks and said it may yet downgrade some of the US's largest lenders. It said it is concerned about impending lower earnings, and the risks to bank funding. They have an eye on how lending on commercial property may need to be written down. This downgrade action is contributing to a wider sell-off by investors in bank shares.</p><p>Meanwhile, American <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q2" target="_blank"><strong>household debt</strong></a> was largely unchanged in the June 2023 quarter primarily because mortgage debt isn't rising. But credit card debt is, and although the rise was modest, it did hit US$1 tln for the first time. Total American household debt is now 63.6% of US GDP. That is down from 64.0% a year ago and down from 66.8% ten years ago. (New Zealand household debt is 92.4% of our GDP.)</p><p>US <a href="https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf" target="_blank"><strong>exports</strong></a> of both goods and services in June held steady from May although they came in -4.3% lower than year ago levels. American imports however were down -7.8% from year-ago levels. Their trade deficit shrank to its lowest in three months.</p><p>US <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales rose marginally</strong></a> last week at brick & mortar stores ending a run of declines. But the improvem