US glummer post-Fed, rest of world upbeat

Kia ora,


Welcome to Friday’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.


And today we lead with news the world's economy is handling the US tariff-tax buffeting quite well.


Financial market reactions to the US Fed rate cut yesterday, and the nature of its split decision, has seen the USD fall, bonds shift to a risk averse tone, and Wall Street retreat, although it has recovered to break-even in the past hour. The oil price has fallen as demand estimates in the US fade.


Today, in a very big shift, there were 313,100 actual initial jobless claims (https://www.dol.gov/sites/dolgov/file...) last week in the US which is the largest weekly rise since early in 2020. There are now 1.965 mln people on these benefits, +2% more than at this time last year.


We should also note that the US home ownership rate (https://www.census.gov/housing/hvs/fi...) in Q3-2025 was 65.3%. A year ago it was 65.6%. (In New Zealand it is 66.0%.) Their rental vacancy rate (https://www.census.gov/housing/hvs/fi...) is now 7.1%, up from 6.9% a year ago.


US wholesale inventories (https://www.census.gov/wholesale/pdf/...) are rising according to late-released September data, now up +4.8% from a year ago. But their inventory-to-sales ratio isn't anywhere near concerning levels yet.


US exports (https://www.census.gov/foreign-trade/...) rose marginally in September, largely driven by the export of gold which accounted for 70% of the monthly rise. Computer exports fell, and travel receipts by visitors also retreated notably. Meanwhile imports (https://www.census.gov/foreign-trade/...) into the US were little-changed. The shift of gold out enabled them to record their lowest trade deficit (https://www.census.gov/foreign-trade/...) since 2020.


In Canada however, their export growth (https://www150.statcan.gc.ca/n1/daily...) was much stronger, and also featuring gold. Their exports jumped +6.3%, while imports were down -4.1%. That turned a trade deficit of -C$6.4 bln in August to a small trade surplus (https://www150.statcan.gc.ca/n1/daily...) of +C$153 mln surplus in September and ending the 2025 negative monthly outcomes. Canada's exports of aircraft, and energy products (oil and electricity) rose significantly in September.


Across the Pacific, Japan’s Business Survey Index (https://www.esri.cao.go.jp/jp/stat/ho...) for large manufacturers rose to +4.7% in Q4-2025, up from 3.8% in the prior quarter and the strongest reading this year. This was better than expected, underscoring continued resilience despite trade frictions, growth concerns and their mounting fiscal risks.


China has signaled (https://h.xinhuaxmt.com/vh512/share/1...) that 2026 economic support from Beijing will be more modest than many had thought it would be.


Switzerland (https://www.snb.ch/en/publications/co...) reviewed its interest rate overnight and left it at 0%. They have inflation at +0.2%.


We can also note the Central Bank of Turkey (https://www.tcmb.gov.tr/wps/wcm/conne...) cut its policy rate by -150 bps to 38% overnight, a fourth consecutive reduction, and by more than markets expected. They claim inflation is starting to ease, especially food inflation. Overall inflation is still running over 30% pa, although that is half the rate of a year ago.


In Australia, their November labour market report (https://www.abs.gov.au/statistics/lab...) showed employment fell -21,300 (s.a.) from October, an unexpected result, but remained +182,400 higher than a year ago. Full-time employment fell -56,500 but part-time employment rose +35,200. Their jobless rate was stable at 4.3%. Underemployment rose to 6.2%.


Container freight rates (https://www.drewry.co.uk/supply-chain...) rose +2% last week from the prior week, largely on the back of rising rates from China to the EU. Rates from China to the US are falling as trade volumes ease. These container rates are now -45% lower than year-ago levels. Meanwhile bild cargo rates are +111% higher than year-ago levels, after last week's -14.8% fall off the recent peak.


The UST 10yr yield is now at 4.12%, down -4 bps from this time yesterday.


The price of gold (http://www.interest.co.nz/charts/comm...) will start today at US$4273/oz, and up +US$70 from yesterday and back near...