Entering a stagnation phase

<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>And today we lead with news the global economic impulse seems to be weakening further.</p><p>US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20231287.pdf" target="_blank"><strong>jobless claims</strong></a> rose last week to +219,000. When seasonal factors are added, this rise was significant. Seasonally, there should have been a decrease. Perhaps we are now getting the American labour market reaction to the slowing economy other data has been pointing to. The bond market is wondering and benchmark rates fell on the data. But there are still only 1.6 mln people on these benefits which is little-changed in a week.</p><p>One place the effects of an economic slowdown might show up is in <a href="https://www.census.gov/wholesale/pdf/mwts/currentwhl.pdf" target="_blank"><strong>inventory holdings</strong></a>. And while they have been rising on an inventory:sales ratio basis for more than a year, it has been off an unusually low base - and inventories actually fell in the April data released earlier today from March. So no confirmation of a slowdown there.</p><p>Japan <a href="https://www.esri.cao.go.jp/jp/sna/data/data_list/sokuhou/gaiyou/pdf/main_1.pdf" target="_blank"><strong>reported</strong></a> a strongish +0.7% GDP advance in Q1-2023 over Q4-2022. But that only leaves them +1.3% ahead of year-ago levels. However the more recent bursts higher is a good sign for them. And their <a href="https://www.mof.go.jp/policy/international_policy/reference/balance_of_payments/bpnet.htm" target="_blank"><strong>current account surplus</strong></a> in Q1-2023 has been impressively high as well.</p><p>The recent round of deposit interest rate cuts by state-owned Chinese banks is being seen as <a href="https://www.scmp.com/economy/china-economy/article/3223402/chinas-state-banks-c