Expanding at a fast clip

<p>Kia ora,</p><p>Welcome to Thursday'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 the first world economies seem to be expanding at a very good clip.</p><p>In the US, the <a href="https://www.markiteconomics.com/Public/Home/PressRelease/72d0041a981c420595341ef772405501" target="_blank"><strong>preliminary June factory PMI</strong></a> expanded faster than in May at a roaring level. But the <a href="https://www.markiteconomics.com/Public/Home/PressRelease/72d0041a981c420595341ef772405501" target="_blank"><strong>services PMI</strong></a> slipped back from its record fast expansion but it is still expanding faster than the factory sector.</p><p>May <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>sales of new homes</strong></a> were reported overnight too, but they were a surprise disappointment. But they are still running +9% higher than the year ago level, and a similar gain against May 2019. Given the shortage of houses for sale, it was expected this new home activity would have been very much higher. But there may be resistance to the much higher prices in this market.</p><p>Also disappointing was Canadian <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/210623/dq210623b-eng.htm?HPA=1" target="_blank"><strong>April retail sales data</strong></a> which was quite weak, even though this data is now quite dated.</p><p>China is now battling <a href="https://www.nytimes.com/2021/06/22/business/economy/china-vaccines-covid-outbreak.html" target="_blank"><strong>a damaging reputation risk</strong></a> as its COVID vaccines are not working well in the developing countries it supplied. It's vaccine diplomacy seems to be backfiring badly. It seems to be another massive own-goal, just like its trade actions against Australia.</p><p>Taiwanese <a href="https://eng.stat.gov.tw/point.asp?index=6" target="_blank"><strong>