China Caixin PMI manufacturing ticked up to 49.2, optimism improving

    China Caixin PMI Manufacturing ticked up from 49.0 to 49.2 in January. Caixin noted there were softer falls in output and new orders. Supply chain pressures eased. Confidence around the outlook hit the highest level since April 2021.

    Wang Zhe, Senior Economist at Caixin Insight Group said: “Overall, the pandemic continued to take a toll on the economy in January. Supply and demand weakened, overseas demand was sluggish, employment declined, and logistics hadn’t fully recovered, while the quantity of purchases shrank, inventories dropped, and manufacturers faced growing pressure on profitability. But optimism in the sector continued to improve as businesses expected a post-Covid economic recovery.”

    Full release here.

    Japan PMI manufacturing finalized at 48.9 in Jan, but some positive signals

      Japan PMI Manufacturing was finalized at 48.9 in January, unchanged from January’s 48.9. S&P Global also noted that reductions in output and new orders were slowest since last October. Supply chain disruptions were least widespread for nearly two years. Prices charged inflation cooled to its lowest for 16 months.

      Tim Moore, Economics Director at S&P Global Market Intelligence, said: “Subdued global economic conditions continued to hold back customer demand across the Japanese manufacturing sector in January, but there were a number of positive signals from the latest PMI survey. The rates of decline for output and new orders were the smallest since last October, whilst marginal employment growth was maintained as manufacturers sought to boost capacity in line with long-term investment plans.”

      Full release here.

      NZ employment rose 0.2% in Q4, unemployment rate rose to 3.4%

        New Zealand employment rose 0.2% in Q4, below expectation of 0.3%. Employment rate was unchanged at 69.3%. Unemployment rate rose from 3.3% to 3.4%, above expectation of 3.3%. Participation rate was unchanged at 71.7%. Labor cost index rose 1.1% qoq, below expectation of 1.3% qoq.

        “The unemployment rate, as measured by the Household Labour Force Survey (HLFS), has remained at or near historic lows since the September 2021 quarter,” work and wellbeing statistics senior manager Becky Collett said.

        Full release here.

        Canada GDP rose 0.1% mom in Nov, to be essentially flat in Dec

          Canada GDP grew 0.1% mom in November, matched expectations. Services-producing industries expanded 0.2% mom while goods-producing industries contracted -0.1% mom. 14 of 20 industrial sectors increased in the month.

          Advance information indicates that real GDP was essentially unchanged in December. Also for Q4, GDP growth should be 0.4% qoq, 3.8% yoy.

          Full release here.

          Eurozone GDP grew 0.1% qoq, 1.9% yoy in Q4,

            Eurozone GDP grew 0.1% qoq in Q4, better than expectation of -0.2% qoq. Comparing to the same quarter a year ago, GDP rose 1.9% yoy. EU GDP was flat qoq in Q4, up 1.8% yoy. Annual growth in 2022 was 3.5% in Eurozone and 3.6% in EU.

            Among the Member States for which data are available for the fourth quarter of 2022, Ireland (+3.5%) recorded the highest increase compared to the previous quarter, followed by Latvia (+0.3%), Spain and Portugal (both +0.2%). The highest declines were recorded in Lithuania (-1.7%) as well as in Austria (-0.7%) and Sweden (-0.6%).

            The year-on-year growth rates were positive for all countries except for Sweden (-0.6%) and Lithuania (-0.4%).

            Full release here.

            IMF expects inflation to fall in 2023/24, year head a turning point

              In the new World Economic Outlook report, IMF said global inflation will fall in 2023 and 2024 amid supar economic growth.

              Global growth is projected to fall from 3.4% in 2022 to 2.9% in 2023 (revised up by 0.2%), and then rise back to 3.1% in 2024. Global inflation is projected to fall from 8.8% in 2022 to 6.6% in 2023, and then 4.3% in 2024, staying above pre-pandmeic levels of about 3.5%.

              “The year ahead will still be challenging… but it could well represent a turning point with growth bottoming out and inflation declining,” IMF chief economist Pierre-Olivier Gourinchas told reporters.

              “The fight against inflation is not yet won,” Gourinchas warned. And it’s “premature to put too much weight on that sort of benign scenario” where prices cool on their own.

              France GDP grew 0.1% qoq in Q4, up 2.6% in 2022

                France GDP grew 0.1% qoq in Q4, better than expectation of 0.0% qoq. On average over the year 2022, GDP increased by 2.6% (after +6.8% in 2021 and -7.9% in 2020).

                This annual growth figure was essentially the result of the rebound in activity in the second and third quarters of 2021, as the health crisis receded. Quarter-on-quarter growth was significantly less dynamic over the year 2022. The growth overhang for 2023 stands at +0.3% at the end of the fourth quarter of 2022.

                Full release here.

                China official PMI manufacturing rose to 50.1, non-manufacturing up to 54.4

                  China official PMI Manufacturing rose from 47.0 to 50.1 in December, slightly below expectation of 50.2. PMI Non-Manufacturing jumped from 41.6 to 54.4, above expectation of 51.0. Both indexes were also back in expansion region.

                  Senior NBS statistician Zhao Qinghe noted that economic activity returned to expansion amid an improvement in the business operation climate and the situation.

                  “Meanwhile, many companies in the manufacturing and services sectors still reported a lack of market demand is the major concern for their businesses. The foundation of economic recovery still needs to be further consolidated,” he added.

                  Australia retail sales turnover down sharply by -3.9% mom in Dec

                    Australia retail sales turnover dropped sharply by -3.9% mom to AUD 34.47m in December, much worse than expectation of -0.3% mom. That’s the first contraction after 11 straight months of growth. Still, sales turnover remained elevated at its sixth highest level on record, and was up 7.5% yoy for the year.

                    Ben Dorber, ABS head of retail statistics, said: “The large fall in December suggests that retail spending is slowing due to high cost-of-living pressures… The latest Consumer Price Index showed that prices continued to rise strongly in the December quarter. To see the effect of consumer prices on recent turnover growth, it will be important to look at quarterly retail sales volumes which we will release next week.”

                    Full release here.

                    Japan industrial production declined -0.1% mom in Dec, but expected to rebound

                      Japan industrial production declined -0.1% mom in December, much better than expectation of -0.8% mom. The Ministry of Economy, Trade and Industry retained the assessment from the previous month that industrial production is “weakening.” 10 of the 15 industries surveyed, reported decline in output, four reported increase, and one remained unchanged.

                      Based on a poll of manufacturers, the ministry expects output to remain flat in January, and then grow 4.1% in February. A ministry official said, “we still need to keep a close eye on the influence of a potential spread in coronavirus infections, material shortages and high prices.”

                      Also released, retail sales rose 3.8% yoy in December, above expectation of 3.1% yoy. Unemployment rate was unchanged at 2.5%. housing starts dropped -1.7% yoy. COnsumer confidence rose from 30.3 to 31.0 in January.

                      Eurozone economic sentiment rose to 99.9 in Jan, EU up to 98.0

                        Eurozone Economic Sentiment Indicator rose from 97.1 to 99.9 in January. Employment Expectation Indicator rose from 107.4 to 110.1. Economic Uncertainty Indicator dropped from 27.5 to 26.2. Industry confidence rose from -0.6 to 1.3. Services confidence rose from 7.7 to 10.7. Consumer confidence rose from -22.1 to -20.9. Retail trade confidence rose from -2.7 to -0.8. Construction confidence dropped from 3.6 to 1.3.

                        EU Economic Sentiment Indicator rose from 95.7 to 98.0. Employment Expectation Indicator rose from 106.2 to 108.5 Economic Uncertainty Indicator dropped from 27.0 to 25.9. Amongst the largest EU economies, the ESI increased markedly in France (+4.4), Spain (+2.7), Germany (+2.5), Italy (+1.7) and, to a lesser extent, the Netherlands (+0.5), while it was unchanged in Poland (±0.0).

                        Full release here.

                        Germany GDP contracted -0.2% qoq in Q2, worst than expectations

                          Germany GDP contracted -0.2% qoq in Q2, worse than expectation of 0.0% qoq. Comparing to the same quarter a year ago, GDP rose 0.5% in price adjusted term, or 1.1% in price and calendar adjusted term. For 2022 as a whole, GDP grew 1.8% (price adjusted), or 1.9% (price and calendar adjusted).

                          DeStatis said, After the German economy managed to perform well despite difficult conditions in the first three quarters, economic performance slightly decreased in the fourth quarter of 2022.

                          Full release here.

                          Swiss KOF jumped to 97.2 in Jan, outlook considerably less gloomy

                            Swiss KOF Economic Barometer rose from 91.5 to 97.2 in January, well above expectation of 93.3. That’s the second month of rise in a row, but the index remains below its medium term average. KOF said, “the outlook for the Swiss economy at the beginning of the year is considerably less gloomy than it was in autumn last year.”

                            KOF also noted: “All bundles of indicators contribute to the improvement. They are developing particularly favourably in manufacturing, hospitality and the services sector. Nevertheless, the indicator bundles for manufacturing and services are below their medium-​term average. The indicators for the hospitality sector, on the other hand, jump above the average, so the prospects here are now better than average.”

                            Full release here.

                            BoJ Kuroda: Inflation trend likely to gradually accelerate, but takes some more time

                              BoJ Governor Haruhiko Kuroda told the parliament today, “Japan’s trend inflation is likely to gradually accelerate … but that will take some more time.”

                              “Uncertainty regarding Japan’s economy is extremely high. It’s therefore important now to support the economy, and create an environment where companies can raise wages,” he said.

                              Separately, a panel of academics and business executives urged BoJ to make the 2% inflation target a long-term goal, to make monetary policy more flexible.

                              “The way the BOJ conducts monetary policy must be revamped,” Yuri Okina, a candidate for the next BOJ deputy governor.”By making 2% inflation a long-term goal, the BOJ can make its monetary policy more flexible.”

                              NZ goods exports rose 11% yoy in Dec, imports rose 1.8% yoy

                                New Zealand goods exports rose 11% yoy or NZD 640m to NZD 6.7B in December. Goods imports rose 1.8% yoy or NZD 125m to NZD 7.2B. Monthly trade deficit narrowed to NZD -475m, comparing to November’s NZD -2180m and expectation of NZD -1750m.

                                The US leads monthly expect rise, up 40% yoy, while exports to all trade partners were up, including China (up NZD 4.2m), Australia (up 17% yoy), EU up (9.8% yoy), and Japan (up 14% yoy).

                                The US also leads monthly import rise up 80% yoy. Others were mixed with China down -11% yoy, EU up 3.8% yoy, Australia up 7.0% yoy and Japan up 3.4% yoy.

                                Full release here.

                                US PCE price index slowed to 5.0% yoy in Dec, core PCE down to 4.4% yoy

                                  US personal income rose 0.2% mom or USD 49.5B in December, matched expectations. Spending dropped -0.2% mom or USD -41.6B.

                                  PCE price index rose 0.1% mom while core PCE price index (excluding food and energy) rose 0.3% mom. Prices for goods was down -0.7% mom and prices for services up 0.5% mom. Foods prices rose 0.2% mom and energy prices dropped -5.1% mom.

                                  From the same month one year ago, the PCE price index slowed from 5.5% yoy to 5.0% yoy. Excluding food and energy, core PCE price index slowed from 4.7% yoy to 4.4% yoy. Prices for goods rose 4.6% yoy, services up 5.2% yoy. Foods prices rose 11.2% yoy while energy prices rose 6.9% yoy.

                                  Full release here.

                                  Japan Tokyo CPI core rose to 3.4% yoy, highest in 42 years

                                    In Japan, Tokyo CPI core (all items ex-fresh food), accelerated from 4.0% yoy to 4.3% yoy in January, above expectation of 4.2% yoy. That’s also the fastest annual increase in nearly 42 years since May 1981.

                                    Headline CPI (all items) rose from 4.0% yoy to 4.4% yoy, matched expectations. CPI core-core (all items ex-fresh food, energy) rose from 2.7% yoy to 3.0% yoy.

                                    NZ ANZ business confidence rose to -52, inflation pressures remains intense

                                      New Zealand ANZ Business Confidence improved from -70.2 to -52.0 in January. Own activity outlook rose form -25.6 to -15.8.

                                      Looking at some details, exports intentions rose from -10.0 to -5.4. Investment investment intentions rose form -20.5 to -13.7. Employment intentions rose from -16.3 to -11.1.Pricing intentions rose from 59.1 to 62.4. Cost expectations rose from 84.4 to 91.3. Profit expectations rose from -52.7 to -42.6. Inflation expectations dropped from 6.23 to 5.99.

                                      ANZ said: “Inflation pressures remain intense. Pricing intentions rose 3 points, and cost expectations rose 7 points. Inflation expectations remain stuck around the 6% mark. There’s good reason for the RBNZ to keep hiking a while yet (we are picking +50bp in February).”

                                      Full release here.

                                      US initial jobless claims dropped to 186k

                                        US initial jobless claims dropped -6k to 186k in the week ending January 21, below expectation of 211k. Four-week moving average of initial claims dropped -9k to 197.5k.

                                        Continuing claims rose 20k to 1675k in the week ending January 14. Four-week moving average of continuing claims dropped -11k to 1664k.

                                        Full release here.

                                        US durable goods orders rose 5.6% mom, ex-transport orders down -0.1% mom

                                          US durable goods orders rose 5.6% mom to USD 286.9B in December, above expectation of 2.5% mom. Ex-transport orders dropped -0.1% mom to USD 178.8B, below expectation of 0.0% mom. Ex-defense orders rose 6.3% mom to USD 269.6B. Transportation equipment rose 16.7% mom to USD 108.1B.

                                          Full release here.