The long-Covid economic problem

<p>Kia ora,</p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect 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 that perhaps there is a 'long covid' problem for economies too.</p><p>But first, in the US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20211815.pdf" target="_blank"><strong>jobless claims fell</strong></a> more than expected last week to +258,900 (actual) and a weekly drop of more than -40,000. That takes the total number of people on these programs to under 2.4 mln, the lowest since the start of the pandemic, and back closer to the 'normal' level before the coronavirus crisis.</p><p>There was <a href="https://www.challengergray.com/blog/job-cuts-tick-up-in-september-to-17895-ytd-lowest-on-record-lowest-quarterly-total-since-q2-1997/" target="_blank"><strong>a small uptick in layoffs</strong></a> in September from August, but the quarter end totals were actually the lowest quarter since 1997.</p><p>All eyes are now on tomorrow's US non-farm payrolls report. Analysts see a rise of +500,000, taking the total employed level to 147.4 mln and a gain of +7 mln in a year, but still -2.3 mln fewer than just before the onset of the current crisis.</p><p>In Congress, <a href="https://www.cnbc.com/2021/10/07/lawmakers-reach-deal-on-short-term-debt-ceiling-increase-schumer-says.html" target="_blank"><strong>a deal</strong></a> to kick the can along to December relieves their debt ceiling problems for a few more weeks. This involves a US$480 bln increase to the limit.</p><p>China's <a href="https://tradingeconomics.com/china/foreign-exchange-reserves" target="_blank"><strong>FX reserves</strong></a> were pretty stable in September at just on US$3.2 tln even though that was fractionally lower than expected.</p><p>But Asia’s junk-bond market suffered through another wave of selling, which pushed prices of many Chinese developers’ bonds further into distressed terri