Pandemic consequences bedevil China

<p>Kia ora,</p><p>Welcome to Wednesday’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>And today we lead with news we are in the shadow period until the US House votes on the debt deal. The chatter accentuates the risks of failure, so markets are holding their breath. But they also assume it will get passed.</p><p>Meanwhile, the data being released is all quite bland, and will be until the May non-farm payrolls report is available. American consumer sentiment as <a href="https://www.conference-board.org/topics/consumer-confidence" target="_blank"><strong>monitored</strong></a> in the Conference Board survey held in May when a small dip was anticipated. This is consistent with the good personal income data we had recently, and a declining inflation rate. But overall levels are still low; the Expectations Index has now remained below 80, a level associated with a recession within the next year, for every month since February 2022, with the exception of a brief uptick in December 2022. But the endless signals of recession just don't seem to materialise, probably because of the strong labour markets.</p><p>We get the May US non-farm payrolls report on Saturday NZT and it is expected to show a modest +190,000 gain - although don't be surprised if it beats that estimate yet again.</p><p>The <a href="https://www.dallasfed.org/research/surveys/tmos/2023/2305" target="_blank"><strong>Dallas Fed survey of factories</strong></a> in their oil patch is quite subdued in May which is probably no surprise given the languishing oil price. And with today's oil price retreat it will probably be even lower in June.</p><p>According to the <a href="https://www.fhfa.gov/Media/PublicAffairs/Pages/US-House-Prices-Rise-4pt3-Percent-over-the-Last-Year-Up-0pt5-Percent-from-Q4.aspx" target="_blank"><strong>US Federal Housing Finance Agency</strong></a>, American house prices rose in the year to March at ab