Goods inflation surge reaches limits

<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 there are signs the global rush up of producer prices may be exhausting itself.</p><p>But first, we start today with better-than-expected <a href="https://www.dol.gov/sites/dolgov/files/OPA/media/ui-claims/20211902.pdf" target="_blank"><strong>jobless claims data</strong></a> in the US. The number of Americans filing new claims for unemployment benefits fell to 256,000 last week, the lowest since March 2020 and well below market expectations of 300,000. The number of new filings remains well above pre-pandemic trends of about 210,000 but is certainly moving closer with <a href="https://fred.stlouisfed.org/series/CCSA" target="_blank"><strong>2.17 mln on benefits now</strong></a> and the pre-pandemic level was 1.8 mln. This is all happening as the number of job openings stays close to record high, as workers try to find new jobs with better pay, working conditions, and flexibility.</p><p>Meanwhile, the <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2021-10" target="_blank"><strong>Philly Fed factory survey</strong></a> slipped back and by a bit more than was expected. It is still expanding in that key industrial region and at an above average level, but cost pressures are starting to weigh. Also, the skilled labour pressures are seeing firms commit to much higher capital expenditure to lessen its reliance on labour-intensive aspects of their operations.</p><p>Meanwhile, there was an unexpected jump in existing home sales <a href="https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september" target="_blank"><strong>reported</strong></a> for September. They rose a sharpish +7% to an annual rate of 6.3 mln units in the month to their highest level since January. The shortage of houses for sale is now getting acute, an