Since the middle of the year, it's been the US economy which has staged the most dramatic rebound from the pandemic, underpinned by massive fiscal and monetary stimulus. And the US rebound has, of course, helped Asia's own industrial sector recovery, recorded in the surge in NE Asia's export boost. But data from the last four weeks records what at best is a stumble in that recovery, and which could yet turn into something worse. The Coldwater shocks & surprises index for the US sank into negative territory at the end of December for the first time since early June. #
What's doing the damage is a clear downturn in the delta of the recovery in personal consumption and, crucially, housing. So in the last few weeks, we've had Nov's new home sales down 11% mom and pending home sales down 2.6% mom, we;'ve had personal income and retail sales both falling 1.1% mom in November. And finally, this week, we've seen Dec's non-farm payrolls falling 140k, and ADP's count of private payrolls down 123k. These are disappointments signal not (yet) a recession, but clearly that we've seen the peak of the post-pandemic rebound.
And be aware, this data is from an economy which was just about to discover the pandemic's second wave, the post-election civic fracturing, and the pressure on the dollar and US bond markets. It was just the shudders.