Daily update
Daily update
- The US offers June trade data today. China already published July trade numbers—they were weaker than expected, and the first quarter’s trade data was revised lower. Economists have been suspicious about China’s first quarter export data (China’s reported exports were not matched by other countries’ imports). Revising the numbers now suggests weaker first quarter GDP.
- The slowing of trade (except for cars and mobile phones) reflects three trends. First, there is a soft economic landing, which means demand volumes will slow (and prices are subject to disinflation). Second, there is a switch from spending on goods to spending on services—some of the demand surge in 2021–2 was cannibalizing demand from future years. Third, deglobalization (political barriers to trade) and localization (more efficient to produce near consumers) are changing trade patterns. Mexico overtook China as the US’s largest trading partner this year.
- Slowing demand was evident in the UK’s July BRC retail sales data, which fell in real terms (although wet weather will not have helped). Japan’s household spending fell more than expected in June, with real wage growth still negative.
- Italy’s government revealed a package of economic measures, including more taxi licenses and a special tax on banks. The taxi union’s immediate response was to threaten to strike.
