The economic positives shine

<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 US workers are back with incomes rising faster than inflation, and China is back with notable growth.</p><p>But first up today there was another <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> overnight and that brought a <a href="https://mcusercontent.com/b8a03199b83b7d3f31d0f2086/files/2cc80401-d8ff-e4cf-7a29-a23a55352a34/GDT_330.pdf" target="_blank"><strong>surprise</strong></a> lift in prices - not major, but unexpected. Prices rose +3.2% in USD terms and were up +4.9% in NZD terms. This comes after a series of disappointing results, interrupted by the occasional rise. It is hard to know whether this pattern is repeating or this marks a turning point up. Today's rise was the most since September 2022, but was on low offered volumes, the least since June 2022. The core WMP price only moved up +1.0% but butter was up +4.9% from the prior event, cheddar cheese up +5.7% and SMP was up 7.0%. Rising demand for foodservice uses in China was probably behind these shifts.</p><p>Meanwhile <a href="https://www.redbookresearch.com/" target="_blank"><strong>American retail is still weakening</strong></a>, up a mere +1.1% last week from the same week a year ago, nowhere near enough of a gain to account for inflation. Excluding the pandemic period, that is a weak expansion matching the 2016 period.</p><p>Perhaps Americans are becoming more thrifty? Median weekly earnings of full-time wage and salary workers were +6.1% higher in the first quarter of 2023 compared to the same period a year earlier, according to <a href="https://www.bls.gov/news.release/pdf/wkyeng.pdf" target="_blank"><strong>official US data</strong></a>. Inflation during that time ran at +5.8%. The inflation story is almost always about workers