Expansions roll on but look shaky now

<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 most economic expansions are rolling on, but seem to be less secure as central banks struggle to contain inflation.</p><p>The giant American service sector expansion slowed slightly in October, and by slightly more than was expected. But it is still a healthy expansion, just less so. The widely-watched <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/october/" target="_blank"><strong>local survey from the ISM</strong></a> pegs the decrease due to slower growth in both business activity and new orders and taking this one to an 18 month low for this expansion. The internationally benchmarked <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/f5353cb773ee403280d729591b0e9fa3" target="_blank"><strong>Markit survey</strong></a> is actually recording a small contraction in this sector. This seems unlikely given the jobs and benefit-claims data, but that is what it shows.</p><p>The key metric is out tomorrow, the October non-farm payrolls report, and an expansion of jobs of +200,000 is expected.</p><p>The <a href="https://www.challengergray.com/blog/october-2022-job-cuts-report-numbers-highest-since-february-2021/" target="_blank"><strong>October job cuts report</strong></a> edged up to a tiny 34,000 in the month, but still, that is its highest since October 2021. And there are many reports of firms now bracing for tougher times ahead.</p><p>The number of American <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20222126.pdf" target="_blank"><strong>filing for jobless benefits</strong></a> rose marginally to +186,000 which is still a very low level for them. That means 1.24 mln people are on this unemployment support, and still bumping along near its historic low. That is an 'insure