Global trade integration crumbles

<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 global trade networks seem to be fracturing at a faster pace now.</p><p>But first, there was an outsized jump in <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20222290.pdf" target="_blank"><strong>initial American jobless claims</strong></a> last week, up to +286,000 and pushing the total number of people on these benefits to just under 1.6 mln. The insured jobless rate jumped to 1.1% and while this is still incredibly low, it may well signal the economic slowdown is starting and starting to hit the American labour market.</p><p>But their latest update for <a href="https://www.federalreserve.gov/releases/g19/current/default.htm" target="_blank"><strong>consumer debt</strong></a> isn't indicating households are pulling back. It rose at a moderate pace in October, and there weren't any credit card red flags in this data.</p><p>And it looks like some major components of American inflation are starting to ease. <a href="https://www.freddiemac.com/pmms" target="_blank"><strong>Mortgage interest rates fell</strong></a> last week, back under 7% and back to September's levels. <a href="https://www.apartmentlist.com/research/national-rent-data" target="_blank"><strong>Rents are falling</strong></a>. American <a href="https://gasprices.aaa.com/" target="_blank"><strong>petrol prices</strong></a> are too and back to year-ago levels. These three are large enough categories to be noticeable in household budgets.</p><p>But markets don't think these reduced pressures will bring a change in inflation-fighting attitude at the Fed, and still see them raising rates from here.</p><p>China is cosying up to Saudi Arabia, shoring up its energy supplies and going its own way on global trade. While the Xi's trip there is mostly theatre, it does underscore the fracturi