US the global engine of growth again

<p>Kia ora,</p><p>Welcome to Friday’s holiday edition of 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 the US economic engine is propelling the global expansion again.</p><p>First, a US Fed member has been explicit overnight about when the Fed will act. Jim Bullard <a href="https://www.stlouisfed.org/news-releases/2022/01/06/bullard-discusses-initial-response-inflation-shock" target="_blank"><strong>says</strong></a> they could start to raise their target interest rate as soon as March and shrink the central bank’s balance sheet as a next step in response to surging inflation.</p><p>Initial <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20220006.pdf" target="_blank"><strong>jobless claims in the US rose</strong></a> slightly last week, but a lot of the actual rise was seasonal. There are now almost 1.9 mln people on these benefits reflecting that seasonal rise.</p><p>All eyes are now on the December US non-farm payrolls growth which will be released tomorrow. Analysts have kept their forecasts at +400,000 new jobs.</p><p><a href="https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf" target="_blank"><strong>New orders</strong></a> for American manufactured goods rose by +1.6% from a month earlier in November, the largest increase since May and slightly above market expectations of +1.5%. They are more than +16% higher than year-ago levels.</p><p>The booming American economy is sucking up imports too. Their exports rose but imports rose faster and that raised their overall <a href="https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf" target="_blank"><strong>November trade deficit</strong></a> for both goods and services. That deficit now amounts to just -3.7% of US GDP and is only 15% of domestic factory orders. And it is a key driver of the international economy.</p><p>The widely-watched <a