Surprisingly strong US data undermines bears

<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 of a raft of strong first-tier US data. Their expansion cycle isn't done yet.</p><p><a href="https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf" target="_blank"><strong>New orders for American factory durable goods</strong></a> jumped +1.7% month-on-month in May, following an upwardly revised +1.2% rise in April and easily beating market expectations of a -1% decline. This is the third straight month of rising durable goods orders, led by a surge in orders for aircraft and motor vehicles. Year-on-year they are up +7.3% so a real, after inflation gain now. Capital goods order growth was strong, up +15%. Boardrooms have been bullish, it seems.</p><p><a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>Sales of new houses</strong></a> were very strong in May too, up a full +20% from year ago levels, although to be fair they weren't flash a year ago. These rises matches rising recent <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>building consent data</strong></a>.</p><p>Not so strong was last week's <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales data</strong></a>. On a same-store basis it rose only +0.5% from year-ago levels and much lower than inflations bite.</p><p>But that hasn't held back rising consumer sentiment. <a href="https://www.conference-board.org/topics/consumer-confidence" target="_blank"><strong>The latest survey</strong></a> from the widely-watched Conference Board was noticeably brighter, rising to its highest since January 2022. It was led by younger people, under 35 years.</p><p>Yesterday we noted the dour Texas factory survey. But that isn't indicative of all regions. Today, the <a href="https://www.richmondfed.org/-/medi