September 21-27, 2027
ig news. After an extremely eventful previous week, this one has been much calmer. The most striking was the fall in US net national savings, which fell to minus 0.9% of GDP, or over $260 billion. It has been in the red for six quarters now, the worst streak since the 2008-2009 crisis, when there were ten negative quarters, and since the Great Depression of the early 1930s (15 consecutive quarters).
A small clarification is needed here. State savings are the difference between state revenues and expenditures. If there is a deficit, state savings are a negative value; if there is a surplus in the state budget, they are a positive value.
The sum of gross private saving and government saving is gross national saving. Net national saving is gross national saving minus depreciation, or the sum of net private saving and government saving.
In other words, the current situation means that for 6 quarters in a row the entire American economy has been eating up the previously created resource. Judging by the dynamics (see also the next section of the Review), there is no point in expecting an improvement in the situation, so new records are ahead.
Macroeconomics: UK car production at lowest level in nearly half a century of data collection (not counting Covid):
Рис. 2
Macroeconomics: UK car production at lowest level in nearly half a century of data collection (not counting Covid):
Рис. 3
Italy industrial sales -4.7% y/y, 16th straight loss:
Рис. 4
Germany’s Business Climate Index (IFO Survey) is only 0.1% off its 15-year low (excluding Covid):
Рис. 5
And its component for assessing the current situation confidently updated this minimum:
Рис. 6
Italy’s business confidence weakest in 11 years (excluding Covid dip):
Рис. 7
The situation is the same in the Eurozone industry:
Рис. 8
Australia’s PMI (46.7) is the weakest since the peaks of Covid:
Рис. 9
In Germany, the annual bottom and depression zone (40.3):
Рис. 10
The picture is similar in the US (47.0):
Рис. 11
The indicator of industrial activity in the Richmond Fed area in the US is the weakest since April 2009 (excluding Covid):
Рис. 12
The Kansas Fed’s All-Industry Index has failed to turn a positive record for 24 straight months:
Рис. 13
Pending existing home sales in the U.S. continue to hover near a 24-year record low:
Рис. 14
US consumers are pessimistic at their most in 2 years:
Рис. 15
Unemployment numbers in Germany rise for 21 months in a row:
Рис. 16
And it has already reached its peak in almost 10 years (not counting Covid, whose peak, however, is also nearby):
Рис. 17
Unemployment rate at its highest in more than 8 years:
Рис. 18
The Bank of China has unveiled a powerful monetary stimulus plan: the reserve requirement has been cut by 0.5% to 9.5% (an 18-year low), the 7-day reverse repo rate by 0.2% to 1.5% (a record low), 14-day repo rates by 0.10% to 1.85% (also a historic low), and one-year loans by 0.3% to 2.0%; mortgage conditions have been eased and other measures have been taken in various areas:
Рис. 19
Рис. 20
Рис. 21
Рис. 22
In response, the Shanghai Stock Exchange soared 12.8% in a week, a phenomenon unseen since 2008:
Рис. 23
The Bank of Sweden has cut its rate by 0.25% to 3.25% and is ready to continue easing. The Swiss Central Bank (-0.25% to 1.00%) and the Mexican Central Bank (-0.25% to 10.50%) have adopted a similar policy.
The Bank of Australia has kept its monetary policy unchanged and is not yet ready to ease it.
But the Nigerian Central Bank has raised its rate by 0.50% to a record 27.25% in the country’s history:
Рис. 24
Main conclusions. Everything is clear with the US, our readers remember to note that the US economy has already entered a long-term recession in 2021 https://fondmx.pro/en/weekly-wrap/the-tonic-of-structural-crisis/ . Macroeconomic data (taking into account the real value of inflation, see, for example, the last section of one of the reviews for March of this year: https://fondmx.pro/en/weekly-wrap/no-signs-of-improvement-found/ ) show this decline since the fall of 2021, but even distorted indicators are beginning to demonstrate frankly negative dynamics.
As for the situation in China, given the data from the previous week https://fondmx.pro/en/weekly-wrap/liar-liar-pants-on-fire/ the Chinese leadership needed to do something. Another thing is that the financial indicators of the Chinese economy are already very overheated, where else can they soften the monetary policy … However, here, as in the US, what is worse, high inflation or an outright economic downturn. For the US, inflation was more important at first, now they have switched to industrial indicators. For China, most likely, the main thing is also industrial growth indicators.
In general, it is impossible to draw any new conclusions based on the data of the latest review. It is, in a sense, typical and only demonstrates how sad the situation looks. And in the European Union, and in the USA, and in China. However, our readers have long been warned and therefore armed and can calmly relax on the weekend and prepare for the upcoming work week!