US economy shifts to a slower gear

<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 there are increasing signs the recent US boom is coming to an end, not necessarily with a recession, but with less expansionary conditions. This is flow through to the global economy quite quickly.</p><p>First, US factories are <a href="https://www.markiteconomics.com/Public/Home/PressRelease/b669b93cb25f4270952e1d9a03be464e" target="_blank"><strong>expanding less quickly</strong></a>. And their services sector's expansion is slowing too. However, both are still expanding at quite good levels.</p><p>That slowdown is also noticeable in the latest <a href="https://www.richmondfed.org/-/media/RichmondFedOrg/research/regional_economy/surveys_of_business_conditions/manufacturing/2022/pdf/mfg_05_24_22.pdf" target="_blank"><strong>Richmond Fed factory survey</strong></a> for May. That same survey showed cost pressures hit a record high.</p><p><a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>New home sales</strong></a>in the US actually slumped in April. This was quite a big miss, the level of retreat quite unexpected.</p><p>The good year-on-year gains in <a href="https://tradingeconomics.com/united-states/redbook-index" target="_blank"><strong>retail sales</strong></a> also look like they are coming to an end.</p><p><a href="https://www.markiteconomics.com/Public/Home/PressRelease/bc097909c30948a2aa6cdfc7f06a4db5" target="_blank"><strong>Japan's May PMIs</strong></a> are suggesting that their services sector is expanding faster while their factory sector is expanding slower, a net 'win' for their overall economy.</p><p>So far, despite war to the east of them, <a href="https://www.markiteconomics.com/Public/Home/PressRelease/bc097909c30948a2aa6cdfc7f06a4db5" target="_blank"><strong>economic activity in the EU is holding up</strong><