Global economy takes a one-two punch

<p>Kia ora, </p><p>Welcome to Monday'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 China's economy appears to be contracting now, and the giant US economy is slowing at the same time.</p><p>But first, just a reminder that this is a long holiday weekend in both the US and Canada, their Labor Day weekend (Labour Day in Canada!), signaling the end of their summer holiday season. If you are an investor and "sold in May, and went away", then this is when you return to the markets. (Wednesday, our time.) Volumes will rise from here.</p><p>China is on its way back from its summer holidays too, but not to an expanding economy. The private <a href="https://www.markiteconomics.com/Public/Home/PressRelease/24e272a6d6f043f18ac299776482d004" target="_blank"><strong>Caixin PMI for their services sector</strong></a> was very weak, contracting at a faster rate. It is now at a 20 month low. New order levels retreated. This is lower than <a href="http://www.stats.gov.cn/tjsj/zxfb/202108/t20210831_1821440.html" target="_blank"><strong>the official version</strong></a> which also signaled a sharp retreat, confirming not only a loss of momentum, but an outright contraction in their service economy.</p><p>China's heavy truck sales plunged in August, down almost -20% from July, and down more than -50% from August 2020. Excavator sales fell sharply too. Recovery seems to depend on new Beijing stimulus.</p><p>In Japan, Prime Minister Suga <a href="https://www.kantei.go.jp/jp/99_suga/statement/2021/0903kaiken.html" target="_blank"><strong>said</strong></a> he won’t seek re-election as ruling-party leader, effectively ending his term after just a year. The old revolving door for Japanese prime ministers might be returning.</p><p>In Europe, <a href="https://ec.europa.eu/eurostat/documents/2995521/11563255/4-03092021-AP-EN.pdf/768a6d1c-b8b7-4845-2d43-7c8abfc9973b?t=1630654859847" target="_