Episode Details

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Kia ora.

Welcome to Wednesday’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 economic issues are coming to a head in both the US and China.

But first up today, there was a Pulse dairy auction overnight which basically recorded lower prices for both SMP and the butter fats, down about -1% in both USD and NZD terms. But the WMP product bucked that trend, up +1% for both.

In the US, the weekly ADP jobs monitoring saw the expansion fall back again last week to under +17,000 new jobs nationwide in private payrolls, the lowest gain since mid August.

US durable goods orders for September were up a very strong +10.0% from a year ago. Non-defence, non-aircraft capital goods orders were up +13.7% on the same basis. The AI buildout is clearly a significant part of this because "computers & electronic products" were up +16.3% within these rises.

However, sales of new single family homes were down -0.6% in September from August, down -5.3% from a year ago.

Surprising analysts, the Conference Board's October survey of consumer sentiment was suddenly very positive, up very sharply when a solid fall was anticipated. The said the turnaround was driven primarily by improved perceptions of current and expected business conditions.

That turnaround was not obvious in the October factory survey in the Richmond Fed's district which is now at its lowest level since February. They report new orders fell and the employment index fell as well.

And we should note that Boeing shares have fallen sharply today as they scale back their delivery targets. They are down almost -10% so far today, down a quarter over the past year. It is another example to the widening gulf between the AI economy and the core industrial base of the US.

In Texas, their services sector did bounce back in October from a weak September and that was better than the expected extended weakness.

In Taiwan, after an unusually positive result in September, their consumer sentiment slipped back but only to the good levels it has been at since May 2025.

Interestingly, there are no local consumer sentiment surveys out for China. Obviously surveyors are concerned about reporting unflattering results. But the OECD has been running a very long-running one beginning in 1990 but the last data point is July 2026. That reveals the post pandemic doldrums have never been shaken  over the past three years.

Bolstering sentiment is now a sudden priority in Beijing. Overnight their central bank inject more than ¥1 tln in reverse repo funding into their banking system,

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