China's slower expansion in spotlight

<p>Kia ora,</p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect 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 China's expansion is wavering and that is either a worry, or more realistic, depending on your perspective.</p><p>But first, US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20211348.pdf" target="_blank"><strong>initial jobless claims</strong></a> came in at the expected level of +383,000 and unchanged from the prior week. There are now 3.1 mln people on these benefits which was a drop of more than -100,000 and a post-pandemic low as more people regained employment, and more people found their coverage expiring.</p><p>There were two American regional factory surveys out for July overnight. The US <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2021-07" target="_blank"><strong>Philly Fed survey</strong></a> is still expanding at a healthy rate but less so. The New York <a href="https://www.newyorkfed.org/medialibrary/media/survey/empire/empire2021/esms_2021_07.pdf?la=en" target="_blank"><strong>Empire State survey</strong></a> surged higher to a new record level. Both recorded much higher input costs - and employment gains.</p><p>The US Fed's <a href="https://www.federalreserve.gov/releases/g17/Current/default.htm" target="_blank"><strong>industrial production data</strong></a> for June wasn't so expansionary but maybe that will come when the July data is in. However for June total industrial production rose at an annual rate of +5.5% despite a sharp drag from vehicle manufacturing in the month (due to the shortage of computer chips and one that is spiking buyer demand). All this may sound positive, but it is still -3.7% lower than for June 2019, so no recovery yet to pre-pandemic levels.</p><p>In South Korea their central bank kept its official rate (0.5%) and settings <a href="http://www.interest.co.nz/sites/d