China's recovery boosts global prospects

<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>Today we lead with news the IMF says the world in back on a rising expansion track, even if it is pretty modest by past standards.</p><p>But first, remember all local eyes will be on Stats NZ at 10:45am this morning and the December labour market stats. Our jobless rate is expected to remain at a very low 3.3% but jobs growth is expected to be a minimal +0.3% in a very tight labour market. Any significant changes from these levels could be market-moving.</p><p>In China, according to their <a href="http://www.stats.gov.cn/tjsj/zxfb/202301/t20230130_1892584.html" target="_blank"><strong>official survey</strong></a>, their factory sector bounced back to an expansion in January. It was an unexpected improvement.</p><p>Better yet for them, their services sector survey recorded a very large improvement, one that indicates the non-manufacturing sector is expanding its fastest in seven months. This was also very much better than anticipated. Most analysts had expected both sectors to struggle for some months yet as they reopened.</p><p>Both indicators, if they are confirmed in the private surveys, will probably light a fire under commodity prices in the days and weeks to come.</p><p>Japanese <a href="https://www.meti.go.jp/statistics/tyo/iip/result-1.html" target="_blank"><strong>industrial production was weaker</strong></a> in December however, but only marginally so, and nowhere near as weak as expected.</p><p>Meanwhile, Japanese <a href="https://www.meti.go.jp/statistics/tyo/syoudou/result/sokuho_1.html" target="_blank"><strong>retail sales rose +3.8%</strong></a> in December from a year earlier, better than expected and following a +2.5% gain in November which was considered very good at the time. This was also the tenth straight month of growth in their retail trade, as domestic consumption cont