US debt negotiations unresolved

<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 there is still no US debt deal, and that is starting to raise financial market nerves.</p><p>Also, American <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales are still in the doldrums</strong></a>, rising minorly above last year level in last week's same-store assessment, but still well below the expansion that inflation requires to just stay even.</p><p>And the latest look at the A<a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/fb16b048c1ca4d659e136ae0c52faaa2" target="_blank"><strong>merican factory PMI</strong></a> (for May) shows them slipping from a steady state into a minor contraction. However, that was cancelled out and more by an <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/fb16b048c1ca4d659e136ae0c52faaa2" target="_blank"><strong>improving services</strong></a> landscape where the expansion gathered pace in May and is now at more than a one year high</p><p>But that services improvement is not reflected in the mid-Atlantic states, where the Richmond Fed reports weakness in both their <a href="https://www.richmondfed.org/-/media/RichmondFedOrg/research/regional_economy/surveys_of_business_conditions/service_sector/2023/pdf/svc_05_23_23.pdf" target="_blank"><strong>services</strong></a> and <a href="https://www.richmondfed.org/-/media/RichmondFedOrg/research/regional_economy/surveys_of_business_conditions/manufacturing/2023/pdf/mfg_05_23_23.pdf" target="_blank"><strong>factory</strong></a> sectors.</p><p>American <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales activity picked up</strong></a> minorly in April from March, and is now running +12% higher than year-ago levels. However the year-ago base was unusually low.</p><p>In Canada, the