Power stress risks rise in Australia

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news there are worries the Aussie energy transition is falling short and they could face tough choices as early as this summer.But first, US mortgage applications rose +2.3% last week from the prior week and mortgage interest rates held steady at a very high 7.31% plus points. It was their first rise in six weeks and doesn't really interrupt the lower track this market has been on.US pending home sales also ticked a minor +0.9% higher in July from June (in just a 'noisy' change) to be -14% lower than a year ago.The pre-cursor report to the Saturday (NZT) non-farm payrolls report, the ADP employment report, revealed a +177,000 jobs gain by private employers for August. This was slightly less than the +195,000 expected. They said this level is consistent with the pace of job creation before the pandemic. After two years of exceptional gains tied to the recovery, they are moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede. +170,000 more jobs are expected for the non-farm payrolls report.The second estimate of US Q2-2023 economic growth was market down slightly to an annualised +2.1% from the first estimate of +2.4% growth. In Q1-2023 the growth rate recorded was +2.0%. This latest markdown was because both consumers and government spent slightly less in the period than originally estimated. There will be a third and 'final' estimate in about a month. This same data release has PCE inflation running at +2.5%, well down from the Q1 rate of +4.1%.In China, things for Country Garden just get worse. They announced a gigantic loss today and warned of default. The country's overall property crisis is deepening.And elsewhere we have been noting the rise and rise of the Chinese dairy industry. But there are limits and China seems to be bumping up against them now. Demand for meat and dairy is increasing the need for production of feed grains as arable land grows scarce.Japanese consumer confidence dipped marginally in August when a continuing improvement was expected. Prior to July it had risen for eight straight months. The dip was minor however.And staying in Japan, Toyota told suppliers it may produce more than 10 mln vehicles in 2023, a new global record, 3.4 mln in Japan and 6.8 mln overseas. And this is despite a -15% fall in production of its vehicles in China.