Deflation pressure in China eases

<p>Kia ora,</p><p>Welcome to Monday’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 a bit of price stabilisation is returning to the Chinese economy.</p><p>Chinese <a href="http://www.stats.gov.cn/sj/zxfb/202309/t20230909_1942695.html" target="_blank"><strong>consumer price inflation</strong></a> came in little-changed for August. It was up +0.3% from July, and up only +0.1% from a year ago. Milk and lamb prices fell in the month, beef prices were unchanged from July. Year-on-year milk prices are essentially unchanged but beef and lamb prices were down almost -5%.</p><p><a href="http://www.stats.gov.cn/sj/zxfb/202309/t20230909_1942696.html" target="_blank"><strong>Producer prices</strong></a> fell again in China but in August this fall was less than in any month since March on a year-ago basis. There were essentially unchanged from a month ago which is the 'best' they have been since October last year.</p><p>The Japanese economy expanded +1.2% in Q2-2023 from the prior quarter, compared with a flash reading of a +1.5% gain and after a downwardly revised +0.9% rise in Q1. This was the second straight quarter of growth, coming slightly less than market forecasts of a +1.3% rise, and despite being the fastest growth for a year, it was downgraded because of weaker-than-expected household consumption, and investment. Year-on-year, the Japanese economy was <a href="https://www.esri.cao.go.jp/jp/sna/data/data_list/sokuhou/gaiyou/pdf/main_1.pdf" target="_blank"><strong>+2.0% larger</strong></a>, although the Q2-2023 grew at an annualised +4.8% rate, so relatively fast recently. Just not as fast as earlier indicated.</p><p>The Americans reported that their <a href="https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/" target="_blank"><strong>household net worth</strong></a> rose to a record US$154 tln in Q2-2023, a rise of +4.8% in a yea