US ending 2021 with economic momentum

<p>Kia ora,</p><p>Welcome to Friday’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 of the US is ending 2021 on strong economic notes, while China seems to be on the skids.</p><p>New US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20212172.pdf" target="_blank"><strong>jobless claims</strong></a> fell slightly last week to +267,500 and the number of people on these benefits fell to 1.713 mln, and back below pre pandemic levels.</p><p>US <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>housing starts rose strongly</strong></a> to their highest since March and their second highest level ever.</p><p>However, the American <a href="https://www.federalreserve.gov/releases/g17/Current/default.htm" target="_blank"><strong>industrial production</strong></a> gains slipped back in November after a very strong October and to an expansion rate we had been used to seeing. Still they are +5.3% higher than year ago levels.</p><p>The regional <a href="https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/mbos/2021/bos1221.pdf" target="_blank"><strong>Philly Fed factory survey</strong></a> came in much weaker for December than expected, while a similar survey conducted in the <a href="https://www.kansascityfed.org/documents/8552/December-2021-Federal-Reserve-Kansas-City-ManufSurvey.pdf" target="_blank"><strong>Kansas City Fed</strong></a> region was unchanged at a modestly healthy level.</p><p>All this makes the slowing results in the Markit <a href="https://www.markiteconomics.com/Public/Home/PressRelease/f63974aa5288481688b386caf47905e1" target="_blank"><strong>December factory PMI</strong></a> for the US understandable - expanding strongly from an historical perspective, but actually its slowest expansion in the past 12 months. It was always going to be hard to keep the pace up.</p