Welcome to the February 7 2008 editions of the BNZ Weekly and Offshore Overviews.
This is our first Weekly Overview for the month and that means we are running our regular survey of readers. If time permits please click on the URL below and let us know whether you believe the economy will get better or worse over the coming 12 months. Far more importantly however, if you have a minute let us know what you think is happening with your industry at the moment and tell us know what that industry is. The survey results will be released early next week.
This week New Zealand wholesale interest rates and our currency have moved higher partly in response to this morningâ€™s labour market report showing record low unemployment at 3.4% and jobs growth of 23,000 people in the quarter being four times what us economists had expected.
In the United States their monthly labour market report was exactly the opposite and this coupled with a shocking report on the services sector has renewed worries about a US recession and seen the US sharemarket fall about 4%.
In Australia this week the RBA lifted their cash rate another 0.25% because of worries about inflationary pressures in a still very well performing economy but with some weakness showing up in house building and manufacturing.
In Europe weak confidence and retailing numbers were released but inflation data remain bad. Growth is slowing but a rate cut does not appear imminent. In the UK in contrast a rate cut is possible tonight in light of continuing bad numbers on consumer confidence, the housing market, and the manufacturing sector.
In Japan real household incomes and residential construction are falling away. Slower growth lies ahead. Meanwhile in China the authorities have loosened lending restrictions slightly because of worries about the economic impact of the worst snow storms since 1954. But underlying inflationary concerns remain and in fact appear to have got worse.