Successful landings, soft landings, and crash landings

<p>Kia ora,</p><p>Welcome to Thursday’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>And today we lead with news the northern summer data is full of variety today, some positive, others not so much.</p><p>The early look at the <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/3bfc5a90d9d2416a8f6709f78f90d014" target="_blank"><strong>American PMIs</strong></a> shows a small slip in August with their services sector expanding slower, and the contraction in their factory sector easing slightly. Both measures seem to be heading to a steady state in this PMI review. (We won't get the widely-watched ISM PMI results until Saturday, September 2 (NZT). That one will more likely move markets.)</p><p>But new US <a href="https://www.mba.org/news-and-research/newsroom/news/2023/08/23/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications fell hard</strong></a> last week as mortgage interest rates rose. In fact, applications dropped to their lowest level since April 1995. Benchmark rates rose to 7.31% plus points which was their highest since December 2000. The existing home market seems to be closing up shop.</p><p>So it was somewhat unexpected that <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home building starts</strong></a> came in strong in July, up to a +714,000 annual rate of build from a +684,000 rate in June and a surge way above what was expected. And the latest rate is more than +30% higher than the year-ago rate. Perhaps this corner of the American residential housing market is on the move again. All this is happening despite those much higher mortgage rates and correlates well with the positive <a href="https://www.nahb.org/news-and-economics/press-releases/2023/08/multifamily-developer-confidence-in-positive-territory-for-second-quarter" target="_blank"><strong>