The spark dims in the global economy

<p>Kia ora,</p><p>Welcome to Thursday’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>Today we lead with news lackluster data is starting to spread.</p><p>But first, American <a href="https://www.mba.org/news-and-research/newsroom/news/2022/11/16/mortgage-applications-increase-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications ticked up slightly</strong></a>, breaking its recent set of lower levels. And mortgage rates decreased as signs of slower inflation pushed Treasury yields lower. The 30-year fixed rate saw the largest single-week decline since July, dropping to 6.9%.</p><p>Meanwhile, <a href="https://www.census.gov/retail/marts/www/marts_current.pdf" target="_blank"><strong>retail sales</strong></a> in the US surged +1.3% month-on-month in October, the strongest rise in eight months, after a flat reading in September and beating market forecasts of an expected +1% gain. The overall rise was largely driven by car sales which were also up +1.3% as supply chain constraints continued easing. That helped juice petrol sales too.</p><p>But those good October results are unlikely to continue. Major retailer Target <a href="https://investors.target.com/static-files/50aca7af-7ccd-4657-b88f-49c68632433e" target="_blank"><strong>forecast</strong></a> a surprise drop in holiday-quarter sales, blaming surging inflation and "dramatic changes" in consumer behaviour for a drop in demand for everything from toys to home furnishings. Their shares have taken a beating.</p><p>And American <a href="https://www.federalreserve.gov/releases/g17/current/default.htm" target="_blank"><strong>industrial production</strong></a> was lackluster in October as well, slipping month-on-month when a rise was anticipated, and now only +3.3% ahead on a year-on-year volume basis. Good but not as good as expected. It is no surprise then that <a href="https://www.census.gov/mtis/www/data/p