Week 16 | April 17- 21, 2023
Mr. Van Loven A. Abbu, LPT
United States (USD) Highlights:
US Inflation Eases For The Ninth Straight Month To 5%:
In spite of minor swings, the 4-week moving average of US unemployment claims decreased slightly in the most recent data, falling to 239.75 thousand. Even though the number stayed relatively close to pre-pandemic levels, the surprise higher claims figure from the prior week suggested that the economic recovery would still be uneven. The unemployment rate dropped to a post-pandemic low of 3.8% in March, and the economy added 916,000 jobs, the most in seven months, signaling a slow but steady improvement in the labor market. The seasonally adjusted first claims for unemployment benefits increased to 244,000 in the week ending April 15th, up from a revised 230,000 the week before, according to statistics from the US Department of Labor. Even though the most recent figure exceeded expectations, it was still very close to the pre-pandemic level and continued to indicate a strong labor market. For the week ending April 2nd, there were 7,392,279 people collecting unemployment benefits across all programs, down 49,477 from the week before. The US economy has been resilient, and the labor market is still improving despite the pandemic’s persisting obstacles. 
Source: U.S. Bureau of Labor Statistics
US Existing Home Sales Fall 2.4% in March:
Following a significant gain the month before, existing house sales in the US decreased in March 2023. To a seasonally adjusted annual rate of 4.44 million, the sales of previously owned single-family houses, townhomes, condos, and co-ops declined by 2.4% month over month. This decline came after the outstanding 13.8% growth in February, which was the highest increase since July 2020. The housing market is still strong despite the monthly decline because demand outpaces supply and cheap mortgage rates continue to encourage home purchases.The National Association of Realtors’ statistics indicates that the decline in existing house sales was mostly brought on by a lack of available properties on the market. While the median sales price jumped 5.7% year over year to $320,000, the number of properties for sale decreased by 3.1% from the previous month. The National Association of Realtors’ top economist, Lawrence Yun, also made the point that the decline in sales was not evidence of a weakening housing market but a return to more sustainable growth rates following the notable increase in February. 
Source: National Association of Realtors
United Kingdom (GBP) Highlights:
UK Unemployment Rate Rises to 3.8%, Real Wages Fall 3%:
In the months of December 2022 and February 2023, the UK’s unemployment rate increased to 3.8%, beating the market’s forecast of 3.7% and reaching its highest level since Q2 2022. People who have been jobless for up to six months are the main cause of the 49,000 increase in unemployment, while part-time and self-employed employees are the main drivers of the 169,000 gain in employment, bringing the total to 32.95 million. The three months leading up to February had a consistent overall pay increase of 5.9% year over year, while earnings fell 3.0% in real terms, the worst drop since the months between February and April 2009. Even though employment is still improving, the labor market is still dealing with issues like rising inflation, the uncertainty caused by the pandemic, and Brexit. The number of people in employment climbed by 169,000 in the three months leading up to February, according to the UK’s Office for National Statistics (ONS), with part-time employees and self-employed workers accounting for the majority of the rise. The COVID-19 epidemic and Brexit are still having an impact on the UK labor market, the research says, despite the fact that employment is on the rise. The ONS also reported that real salaries decreased by 3.0% owing to inflation, while overall pay growth remained constant at 5.9% year over year. The research emphasizes how important it is for decision-makers to manage the effects of inflation and maintain economic recovery. 
Source: Office for National Statistics
UK Employment Surges with a 169k Rise in Three Months:
In the three months leading up to February 2023, employment on the UK labor market increased significantly, exceeding predictions. The unemployment rate rose by 0.1 percentage points to 3.8 percent despite the increase in employment, making it the highest it has been since Q2 2022. However, those without a job for up to six months were the ones who drove this growth. Real earnings decreased by 3.0 percent, the most since 2009, although overall pay growth remained constant at 5.9 percent annually. Although the increase in employment can signify a strengthening of the economy, the fall in real earnings might signal that pay growth is surpassing inflation, which might have an effect on consumer spending and overall economic growth. The Office for National Statistics reports that both full-time and part-time self-employment contributed to the 169 thousand increase in the number of individuals employed in the United Kingdom in the three months leading up to February 2023. While full-time employment decreased marginally but stayed above pre-pandemic levels, part-time employment rose as well. The number of jobless increased by 49 thousand to 1.29 million, while the unemployment rate increased by 0.1 percentage point to 3.8 percent. However, those who had been jobless for up to six months were the major drivers of the increase. Real earnings decreased by 3.0 percent, the most since 2009, but total pay increasedbyt 5.9 percent annually. 
Source: Office for National Statistics
UK Inflation Remains Stubbornly High at 10.1% in March 2023:
The UK’s consumer price inflation rate in March 2023 decreased slightly to 10.1% year over year from 10.4% in February but remained higher than the market forecast of 9.8%. The rate has now exceeded the Bank of England’s objective of 2% for seven straight months. Rising costs for housing, electricity, food, non-alcoholic drinks, entertainment, and culture, as well as other products and services, are what cause inflation. This means that policymakers could continue to increase borrowing costs, increasing the cost of borrowing for both people and enterprises. Despite remaining constant at 6.2% in March, the core inflation rate is still very near the record high of 6.5% in September 2022. The Office for National Statistics reports that prices for food and non-alcoholic rages increased 19.1% YoY in March as opposed to 18.0% in February. Housing and utility costs climbed by 26.1% YoY, which is less than the previous month’s 26.6% rise. Prices for entertainment and culture rose by 4.6%, up from a 4.0% increase in February. Compared to February, when they increased by 6.6%, other products and services increased by 6.7%. In contrast, the cost of transportation grew by 0.8% rather than 2.9% in February, while the cost of dining out and lodging increased by 11.3% rather than 12.1% in February. These statistics underscore the generalized, ongoing price increases as well as the difficulties the Bank of England has in controlling inflation. 
Source: Office for National Statistics
UK Consumer Confidence Rises to -30 in April 2023, Exceeds Expectations:
The GfK Consumer Confidence Index shows that consumer confidence in the UK has reached its highest level since February 2022. The number increased from -36 in March to -30 in April 2023, exceeding market forecasts. Although the rating stayed below zero, it showed a decline in confidence as the economy continued to be negatively impacted by the cost of living problem and rising interest rates. In spite of this, Joe Staton, client strategy director at GfK, claimed that there had been an unexpected rise in household optimism, which may point to the “green shoots of recovery” in the economy. Although double-digit inflation is still a major issue, it is anticipated that the UK economy will avoid a recession this year. According to GfK, Britons’ optimistic perceptions of their own finances and the general economy are to blame for the increase in consumer confidence. The study also revealed that people were more optimistic about their financial situation in the coming year. Staton thinks the rapid increase in confidence is a good indication for the economy, despite the fact that there are still concerns about rising prices and interest rates. However, policymakers may need to think about increasing borrowing prices as long as the inflation rate exceeds the Bank of England’s objective of 2%. Although the cost of living problem continues to be a top worry for families, the recent increase in consumer confidence may indicate that individuals are becoming more able to withstand the difficulties presented by the epidemic and its negative economic effects. 
Source: GfK Group
UK Retail Sales Drop by 0.9% in March 2023:
Retail sales in the UK dropped by more than anticipated 0.9% in March 2023 compared to the prior month, marking the second consecutive month of decrease. The decline was mostly caused by a 1.3% decline in sales at non-food retailers, notably department stores and clothing retailers, whose sales fell by 3.2% and 1.7%, respectively. The drop in sales was mostly a result of the unfavorable weather in March. Fuel station receipts increased by 0.2% while sales at grocery stores and online plummeted by 0.8%. However, third-quarter retail sales increased by 0.6%, the first three-month on three-month increase since August 2021. Although the survey shows some progress in the UK retail industry, the fall in sales reveals that problems still exist, such as supply chain problems and rising prices, which may continue to influence customer behavior. The Office for National Statistics (ONS) reports that, in March 2023, the volume of UK retail sales decreased by 0.9%, less than the predicted 0.5% decline. Department stores and apparel stores saw sales declines of 3.2% and 1.7%, respectively, leading the reduction in non-food retail sales. Sales at grocery stores dropped by 0.7%, and internet sales dropped by 0.8%. The data shows that despite supply chain problems, rising prices, and unfavorable weather, consumers have been conservative in their spending. Retail sales did, however, increase by 0.6% in the third quarter, indicating some improvement. Food retailers and non-store retailing, which includes internet sales, were the main drivers of the quarterly increase. The research emphasizes the persistent difficulties the UK retail industry is now facing, such as the uncertainties around inflation and Brexit, which might continue to affect customer confidence and purchasing habits. 
Source: Office for National Statistics
Japan (JPY) Highlights:
Japan’s Trade Deficit Widens to JPY 754.7 Billion in March:
The longest stretch since 2015, Japan’s trade deficit increased to JPY 754.7 billion in March 2023. This was the country’s 20th consecutive month of a trade deficit. Even though the trade imbalance was less than the market forecast of JPY 1,294.8 billion, it nevertheless poses a major economic issue for the nation. Policymakers are concerned about the rise in imports, especially energy resources, as it may result in inflation. In the meantime, export growth has slowed, pointing to a decrease in global demand. Despite the difficulties, the trained labor and superior goods of Japan should help the export sector recover.
The Ministry of Finance reports that in March 2023, Japan’s exports to the United States, China, and other Asian nations decreased. The country’s major trade partner, the US, had a 6.3% YoY fall in exports, while China and other Asian nations saw declines of 0.8% and 3.3%, respectively. In the meantime, imports from China increased by 17.7%, showing the Japanese economy’s rising reliance on China. Japan’s trade prospects are still at danger from the epidemic and the global supply chain disruptions. The International Trade Centre (ITC) reports that supply chain concerns, notably in the semiconductor industry, which accounts for a sizeable portion of Japan’s exports, have already hurt the country’s exports.
Source: Ministry of Finance, Japan
Japan’s Annual inflation Rate Falls to 3.2% in March:
In March 2023, Japan’s annual inflation rate decreased to 3.2%, which is the lowest reading since September 2022. The slowdown might be linked to transport expenses, which increased by 1.6% as opposed to 1.7% in February. Additionally, the cost of fuel, lighting, and water decreased more quickly, mostly due to the 8.5% decline in electricity. On the other hand, food prices increased by 7.8%, the most since September 1980. Consumer prices remained over the Bank of Japan’s 2% goal for the 12th consecutive month in March, at 3.1% year over year, despite a modest slowing in the annual pace. Although there are still inflationary pressures in the Japanese economy, a falling rate may provide authorities some leeway. Japan’s inflation rate, according to Trading Economics, peaked at 24.9% in February 1974 and hit a record low of -2.50% in October 2009. Despite its massive monetary stimulus, the Bank of Japan has been unable to meet its 2% inflation objective for years. It is difficult to meet the goal because of the continued supply chain disruptions brought on by the epidemic and the growing cost of electricity. Although there are many obstacles in their way, Japan’s authorities want to increase economic growth and attain price stability. 
Source: Ministry of Internal Affairs & Communications
Canada (CAD) Highlights:
Canada’s Inflation Rate Falls to 4.3% in March 2023:
Canada’s annual inflation rate dropped from 5.2% in February to 4.3% in March 2023, marking its lowest level since August 2021. Base-year impacts on energy prices, which affected transportation expenses, notably gasoline prices, were the main cause of the decline in inflation. Lower housing and food costs somewhat countered the increase in mortgage rates, which contributed to the reduction. In accordance with the decline in the inflation rate reported in March, the Bank of Canada forecasts that inflation will reach 3% by the third quarter. In comparison to a 0.4% increase in February, the Consumer Price Index (CPI) for March 2023 increased by 0.5% on a monthly basis, according to Statistics Canada. A decrease in transportation expenses as a result of decreased fuel prices was the key factor driving the yearly inflation rate down. Due to decreasing costs for fruits and fresh vegetables, food prices also decreased. While this was happening, housing costs decreased as slower homeowner replacement costs offset higher mortgage rates that were in line with rate increases by the Bank of Canada. Overall, the decline in inflation was consistent with forecasts from the Bank of Canada and the market, indicating that they may reach their inflation target by the third quarter of the year. 
Source: Statistics Canada
Euro Zone (EUR) Highlights:
Eurozone Inflation Rate Remains High at 6.9% in March 2023:
The annual inflation rate for the Euro Area in March 2023 was verified to be 6.9 percent, a decrease from the previous year’s record high of 10.6 percent for the fifth straight month. Despite the drop, the rate nevertheless remains above the European Central Bank’s objective of 2.0%, necessitating future rate increases on the part of policymakers. The dip was mostly caused by the fall in energy costs and the inflation of non-energy industrial items, while prices for services and other goods climbed more quickly. The European Central Bank will need to keep working to tighten monetary policy in the upcoming months, according to the persistently high inflation rate. The first monthly fall in two years was seen in energy costs in March 2023, according to Eurostat, the statistical body for the Euro Area. In the meantime, the inflation rate for non-energy industrial products decreased from 6.8 percent in February to 6.6 percent. However, prices for food, alcohol, and cigarettes increased more quickly in March (15.5 percent vs. 15.0 percent in February). Additionally, from 4.8 to 5.1 percent, the inflation rate for services rose. According to the statistics, the European Central Bank will probably continue its efforts to battle excessive inflation and reach its objective of 2.0 percent, even though the overall inflation rate has decreased. 
Source: EUROSTAT
New Zealand (NZD) Highlights:
New Zealand Q1 Inflation Slows to 6.7% YoY:
The annual inflation rate in New Zealand increased 6.7% in the first quarter of 2023, which is a decrease from the 7.2% growth in the previous quarter. Despite this drop, the inflation rate remained high due to increased prices in many other industries, including those of food and alcoholic drinks. However, several industries, including transportation and housing, had slower price growth, indicating that inflationary pressures may be beginning to lessen. During that time, communication costs also decreased. Although these trends could be good news for consumers, policymakers may nevertheless keep a close eye on inflation as they think about future changes to interest rates or other monetary measures.
The cost of housing and household utilities increased 7.1%, down from an increase of 8% in the previous quarter, according to statistics from Statistics New Zealand. Additionally, the cost of transportation increased less quickly, at 3.7% as opposed to 7.4% in the preceding quarter. While food prices rose by 11.3%, those for alcoholic drinks and cigarettes by 7.4%, while the cost of communication declined by 0.3%. These findings imply that even while inflation is still high, some industries may be under less pressure than others. This discovery may have an impact on consumer spending and economic expansion. 
Source: Statistics New Zealand
The information and opinions in this report are for general information use only. This report is subject to change without prior notice. The individual investing goals and financial status of any particular recipient have not been taken into consideration in the preparation of this report. While the material in this article was gathered from sources that the author considered to be dependable, the author neither guarantees nor accepts responsibility for any direct, indirect, or consequential losses that may arise from the use of any such information or opinions.