Anxious times on US recovery

<p>Kia ora,</p><p>Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect 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 that although American stimulus funds are just now being released, there is nervousness about whether they will really juice up their recovery, or will recipients just pay down debt?</p><p>But first up, today's dairy auction has given back some of the prior event's stellar gains. You will recall it rose +15% two weeks ago, but today it slipped -3.8% in US dollar terms, down -2.6% in New Zealand dollar terms. This is actually a sharp variance from what analysts were expected. The average of their expectations was another gain of +9.5% which in hindsight has proven to be quite unrealistic. The key WMP price fell -6.2% and correcting the +20% jump last time. SMP held the line however, up +0.7%. Fewer bidders participated this time, perhaps anticipating those analyst rises. But there were more winning bidders this time.</p><p>Although analysts are saying that a broad US economic rebound is shaping up, there has been some disappointing <a href="https://www.census.gov/retail/marts/www/marts_current.pdf" target="_blank"><strong>retail sales data</strong></a> reported overnight. In February, sales were down across the board by -3.0% on a seasonally adjusted basis from January, but they are up +6.2% year-on-year, although this is when the pandemic impacts were starting to kick in in 2020.</p><p>Last week's <a href="http://www.redbookresearch.com/8702.html" target="_blank"><strong>Johnson Redbook sales data</strong></a> wasn't positive on a month-on-month basis either.</p><p>It may be that anxious American are using their stimulus funds to pay down debt rather than spend, although that conclusion may still be a bit premature.</p><p>Adding to the downer mood has been February <a href="https://www.census.gov/retail/marts/www/marts_current.pdf" target="_blank"><strong>industrial production