Episode Details

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Kia ora.

Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from interest.co.nz.

Today we lead with news of more data that suggests the US economy is not regaining any momentum, and may be about to be tested by record high diesel prices.

US mortgage application levels dipped again last week from the prior week, mainly due to much lower refinancing levels as the high (6.78%) mortgage interest rates stay firm at these levels and a one year high.

Meanwhile US PCE inflation stayed up in July at 3.7% when it was expected to show a small dip. The month-on-month rise was much more than expected. Personal spending rose +5.8% while personal disposable incomes were up +4.2%.from a year ago. So the squeeze continues, and although masked by inflation, many households will be feeling it. And US diesel prices are now at record highs.

US GDP Q2-2026 second estimate came in at a modest +1.5%, and unchanged from its first estimate. Marginally stronger consumer spending was offset by weaker investment and more imports.

The US July durable goods order report came in positively, up +12.9% from the same month a year ago. But without aircraft or defense, it was up +8.7%. Capital goods orders on the same basis were up +13.5%, probably reflecting data center activity.

US crude oil stocks were little-changed last week, a bit less than the modest rise expected. Diesel stocks have hit record lows.

Meanwhile, Meta has agreed to an US$18 bln penalty to be paid over the next decade to resolve claims it designed its social media platforms to addict children. It will change the way it interacts with children. Four of the states who brought the court claim - California, Colorado, Kentucky and New Jersey - were expected to seek substantial civil penalties as wells.

In China, they have China has opened applications for an ¥800 bln policy-based financing tool for local government projects to shore up its slowing economic growth. But there are questions about how much impact this will have in 2026.

Singaporean industrial production extended its very positive run in July, up +5.8% from the same month a year ago and gains similar to most month in 2026.

In Australia, inflation fell in July as expected but not by as much as expected. Their June 3.8% rate fell to 3.5% in July but still well above the expected 3.2% rate assumed by financial markets. That gave the AUD a bounce, likely on the basis that the RBA's tolerance for still-high inflation may be about to get tested. The next