The international economic slowdown shows up and spreads

Kia ora,Welcome to Tuesday’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.Today we lead with news international inflation is still raging, while the economic slowdown needed to quell it is starting to show in some parts.There were two regional factory surveys out overnight in the US. The Chicago PMI was little changed and that was an unexpected disappointment because an improvement was expected. It remains quite negative. And the Dallas Fed factory survey for October was also disappointing. Output rose there but the level of new orders didn't and the firms surveyed said the outlook isn't as positive. The Dallas Fed factory survey has been more negative than anywhere else in the rest of the country.The official Chinese factory PMI unexpectedly fell to 49.2 in October from 50.1, missing market forecasts of 50.0. This was the lowest reading since July, and comes amid the return of strict pandemic restrictions in several big cities with output, new orders, and export sales all falling. Their service sector PMI's turned negative too, largely for the same reason.And here's an indication of just how tough China's anti-Covid measures are. It locked crowds in the Shanghai Disneyland after a case there was suspected. And it is not the first time they have done something like that.Meanwhile, the Hong Kong economy is going backwards faster, down a sobering -4.5% from the same period a year ago. This is its steepest contraction since the 2020 pandemic period, and before that the worst since the GFC.Japanese industrial production was up +9.8% in September from a year ago, but that is artificially enhanced by a weak base. From August, there was slippage, down -1.6% which is rather a sharp negative change.Japanese retail sales rose by 4.5% in September 2022, compared with an expected +4.1% gain. This was the seventh straight month of increase in retail trade there and the steepest pace since May 2021, and interestingly higher than CPI inflation.The overall inflation rate in the EU rose to 10.2%. It was the first time it has been in double figures since the EU was formed. Yesterday, we reported Germany's +11.6% rise, today we can note France is up +7.1%, Italy up +12.8%, and Spain was up +7.3%. Germany retail sales rose in September from August (in 'real' terms), an improvement analysts were not expecting.Despite those pressures, the EU is still expanding, even it it