Expanding services hold global economy together

<p>Kia ora,</p><p>Welcome to Thursday’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 world's economies are being bolstered by expanding service sector activity.</p><p>In the US, there were two services PMIs out overnight, both signaling a modest expansion. The <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/march/" target="_blank"><strong>ISM</strong></a> services version fell in March from the prior month and to well below forecasts. They now have their slowest growth in the services sector in three months. Demand and employment cooled while capacity and logistics improved, and price pressures eased to their lowest since September 2020. The internationally benchmarked <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/c9479e7315af4c8e98992177848e5ba1" target="_blank"><strong>Markit version</strong></a> actually rose in March, but to the same level as the ISM one. It didn't show the strong expansion in February.</p><p>US <a href="https://www.mba.org/news-and-research/newsroom/news/2023/04/05/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications fell</strong></a> rather sharply last week, down -4.1% from the prior week and are now running -35% lower than a year ago. Spring may have arrived in the US, but the housing market is missing the customary burst in listings and purchase activity. There was virtually no change in the average mortgage interest rate last week to affect these results</p><p>The precursor<a href="https://adp-ri-nrip-static.adp.com/artifacts/us_ner/20230405/ADP_NATIONAL_EMPLOYMENT_REPORT_Press_Release_2023_03%20FINAL.pdf?_ga=2.147881470.837077932.1680718830-88946142.1678296253" target="_blank"><strong>ADP employment report</strong></a> ahead of Saturday's official non-farm payrolls report shows private bus