'A gloomy and uncertain outlook'

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the global economy is slowing amid 'a gloomy and uncertain outlook'.</p><p><a href="https://www.interest.co.nz/sites/default/files/2022-07/text-en.pdf" target="_blank"><strong>The IMF lowered its growth forecasts</strong></a> for the global economy to +3.2% in 2022 from +3.6% in its April review, while the outlook for inflation was revised higher due to a surge in food and energy prices as well as lingering supply-demand imbalances. The American economy is seen growing +2.3% this year (down from -3.7% seen in April) and China's GDP is now expected to expand +3.3%, compared to +4.4% early.</p><p>Even though they say "the outlook has darkened significantly" they are still forecasting 2022 growth and that might surprise some bears, but the fact remains that global economic activity is still expanding in the major economies, and that is expected to continue even into 2023.</p><p>American <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales rose</strong></a> at as fast a clip last week as we have seen for the past four weeks, and certainly far more than can be accounted for by inflation.</p><p>But <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales in the US tailed off rather sharply in June</strong></a> and slipping below the 600,000 annualised rate for the first time since the March 2020 pandemic pullback.</p><p>And <a href="https://www.conference-board.org/topics/consumer-confidence" target="_blank"><strong>American consumer sentiment dipped again</strong></a> in July, according to the Conference Board survey. The decrease was driven primarily by a decline in the Present Situation Index—a sign growth has slowed at the start of Q3. The Expectations Index held relatively steady.</p><p>But i