China's stumble threatens trade growth

<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>Today we lead with news the extent of China's economic stumble amid its latest pandemic crisis is becoming evident.</p><p>But first, the level of <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20220598.pdf" target="_blank"><strong>new American jobless claims</strong></a> continues to fall, sinking to new modern lows with 193,000 new actual claimants last week. There are now 1.65 mln people on these benefits, the lowest since 1968, and the lowest in more than half a century. Note that the US labour force grew by +100 mln in that time and is now 2.5 times larger so as a proportion of the workforce, this is easily the lowest ever.</p><p>A well-known Fed hawk is out <a href="https://www.stlouisfed.org/news-releases/2022/04/07/bullard-discusses-is-the-fed-behind-the-curve" target="_blank"><strong>pitching for a rate hike program totaling +300 bps</strong></a>, noting the US economy is booming and unless they act fast inflation will get away on policymakers. Essentially he is backing up Vice Chair Brainard's recent remarks.</p><p>There was clear evidence of the boom conditions in the US economy this morning. <a href="https://www.federalreserve.gov/releases/g19/current/default.htm" target="_blank"><strong>The Fed's data on consumer credit</strong></a> jumped far more than expected in March. It grew by +US$42 bln in the month, the most ever and reaching US$4.45 tln. Two thirds of the rise was for revolving credit, such as for credit cards. It isn't clear yet whether that is a sign of consumer stress, or consumer optimism. With the jobless rate being very low, and jobless benefit claims very low, it seem unlikely to be stress-related.</p><p>Later today, Canada will release its Budget for 2022/203 and it is <a href="https://www.cbc.ca/news/politics/freeland-federal-budget-housi