US resilient, China weak, India up but has problems

<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>And today we lead with news American inflation and consumer spending remain at levels above where the US Fed needs them to be.</p><p>But first, actual American <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20231926.pdf" target="_blank"><strong>jobless claims</strong></a> came in at a low 192,000 last week, lower than expected and there are now under 1.8 mln people on these benefits. This is a good way to head into their Labor Day holiday, with only the August non-farm payrolls report due now. That is out tomorrow and is expected to show a modest increase of +170,000 jobs created.</p><p>US <a href="https://www.bea.gov/news/2023/personal-income-and-outlays-july-2023" target="_blank"><strong>PCE inflation</strong></a> was confirmed at 3.3% in July.</p><p>American <a href="https://www.bea.gov/news/2023/personal-income-and-outlays-july-2023" target="_blank"><strong>personal income</strong></a> rose by +0.2% from the prior month in July, after a +0.3% increase in June. This was slightly below market forecasts of a +0.3% rise. But the growth in wages and salaries rose by +0.4%. Year on year, these are up +4.6%.</p><p>Meanwhile, <a href="https://www.bea.gov/news/2023/personal-income-and-outlays-july-2023" target="_blank"><strong>personal spending</strong></a> jumped by +0.8% in July, the most since January and above market expectations. Year on year, these are up +6.4%.There is consumer resilience here that the Fed will have noticed. Note that the difference between income and spending is actually little different in dollar terms, only marginally less savings are being recorded and only a marginally lower savings rate.</p><p>Elsewhere, the <a href="https://chicago.ismworld.org/news-publications/reports/research-survey/" target="_blank"><strong>Chicago PMI</strong></a> came i