Plenty of global gloom, but also some bright spots

<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 the new war in Gaza, and a stumbling Chinese economy are together posing new risks to an already fragile global economy. But there are some bright spots still.</p><p>Firstly in the US, one-year ahead <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20231010" target="_blank"><strong>inflation expectations</strong></a> held steady at 3.7% in September, up fractionally from August. Conversely, five-year-ahead inflation expectations declined by 0.2 percentage point to 2.8%. Perceptions about households’ current financial situations slipped slightly in September with more respondents reporting being worse off than a year ago and fewer respondents reporting being better off. In contrast, year-ahead expectations improved with more respondents expecting to be better off a year from now.</p><p>The weekly bricks & mortar retail store survey <a href="https://www.redbookresearch.com/"><strong>reported</strong></a> that sales were +4.0% higher than a year ago, indicating is sector of their retail industry is back experiencing real, above-inflation growth.</p><p>Not so happy are small business owners for whom <a href="https://www.nfib.com/content/press-release/economy/small-business-optimism-dips-in-september-as-inflation-remains-top-problem/" target="_blank"><strong>optimism dipped in September</strong></a> as inflation remains the top problem in their mind. Oddly this survey has been the inverse of the retail survey with small business owners more optimistic when sales growth was lower and less so when it rises above inflation. Odd.</p><p>It is probably worth pointing out that a <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2023/R_20231010_4.pdf" target="_blank"><strong>US$46 bln US bond tender</strong></a> today was wildly popular,