Global economy still improving

<p>Kia ora, </p><p>Welcome to Tuesday'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 of steps forward and back in the global economy.</p><p>First, American pending home sales tumbled in July, down -1.8% from June, which takes them -8.5% lower than for July 2020. This was unexpected weakness. The real estate industry <a href="https://www.nar.realtor/newsroom/pending-home-sales-wane-1-8-in-july" target="_blank"><strong>reports</strong></a> that while inventories of homes for sale are rising, buyers have become much more circumspect, especially in the North East states.</p><p>Also falling back rather noticeably was the <a href="https://www.dallasfed.org/research/surveys/tmos/2021/2108.aspx" target="_blank"><strong>Dallas Fed factory survey</strong></a>. Conditions are still expanding there, just not as vigorously. Prices and wages continued to increase strongly in August, but new order growth slowed.</p><p>The OECD is <a href="https://www.oecd.org/sdd/na/GDP-Growth-Q221.pdf" target="_blank"><strong>reporting</strong></a> that the United States is the only major-seven economy that has returned to pre-pandemic economic output levels in the second quarter of 2021, with GDP exceeding the pre-pandemic level by +0.8%. All the other majors have yet to achieve that with the UK the furthest away.</p><p>We should keep an even closer eye on China, because <a href="http://m.cyol.com/gb/articles/2021-08/29/content_J7n6YUZyw.html" target="_blank"><strong>official commentary</strong></a> says the country is about to enter another 'profound revolution', warning anyone who resisted would face punishment.</p><p>“This is a return from the capital group to the masses of the people, and this is a transformation from capital-centered to people-centered,” the commentary said. “Therefore, this is a political change, and the people are becoming the main body of this change again, and all t