The world is in a flux.
China makes strides towards recovery and the US grapples with mixed economic news.
Will the future belong to a new economic superpower?
🧵
China makes strides towards recovery and the US grapples with mixed economic news.
Will the future belong to a new economic superpower?
🧵
1/ Another series of Marco Pulse 02.05.2023
This thread will cover these 3 areas:
1️⃣ Mixed Signals: The State of the US Economy
2️⃣ China's Economic Resurgence
3️⃣ Shifting trade patterns and the impact on economic stability
This thread will cover these 3 areas:
1️⃣ Mixed Signals: The State of the US Economy
2️⃣ China's Economic Resurgence
3️⃣ Shifting trade patterns and the impact on economic stability
2/ 1️⃣ Mixed Signals: The State of the US Economy
3/ 🟢 Labor Market
US labor market is doing pretty well:
▫Record low unemployment rate
▫Modest employment growth in March
▫Higher labor force participation among workers of prime age
▫Manufacturing employment fell
US labor market is doing pretty well:
▫Record low unemployment rate
▫Modest employment growth in March
▫Higher labor force participation among workers of prime age
▫Manufacturing employment fell
4/ The labor force has grown in size and inflationary pressures have decreased as a result of a dramatic resurgence in immigration.
5/ 🟢Inflation
Inflation is tricky to tame, but it seems like the US is making some headway.
Inflation has decreased to its lowest level since May 2021, which is unquestionably fantastic news.
Inflation is tricky to tame, but it seems like the US is making some headway.
Inflation has decreased to its lowest level since May 2021, which is unquestionably fantastic news.
6/ When we take the volatile energy and food costs out of the equation, core inflation still stands at 5.6% from a year ago. This is partially explained by how rising property prices are maintaining core inflation.
7/ It's a bit of a two-edged sword because, while the decrease in home prices later this year will contribute to reducing core inflation, it might also have a negative effect on the housing market.
8/ There is a heated argument concerning the persistence of inflation and whether the Federal Reserve should keep a tight monetary policy. We'll have to wait and see how this all plays out.
9/ 🟢Financial market
The financial markets appear to be in reasonable form, despite a challenging year of monetary policy by the FED to fight inflation,
Risk spreads spiked in response to the financial crisis brought on by SVB's bankruptcy. Stablized by the swift FED actions.
The financial markets appear to be in reasonable form, despite a challenging year of monetary policy by the FED to fight inflation,
Risk spreads spiked in response to the financial crisis brought on by SVB's bankruptcy. Stablized by the swift FED actions.
10/ Risk spreads back to pre-crisis levels. A situation similar to that of Lehman Brothers was thereby prevented.
Given the perceived danger of financial harm, the FED could end monetary tightening sooner than originally predicted.
Given the perceived danger of financial harm, the FED could end monetary tightening sooner than originally predicted.
11/ 🟡Manufacturing investment
The amount of intended investment was increased by US manufacturers, particularly in semiconductors and clean energy technology.
The amount of intended investment was increased by US manufacturers, particularly in semiconductors and clean energy technology.
12/ It's not apparent if investments supported by government subsidies have as favorable an impact on productivity as other forms of investment.
However this might increase employment and economic growth.
However this might increase employment and economic growth.
13/ 2️⃣ China's Economic Resurgence
14/ 🟢Fiscal Policy
Retail sales, exports, and infrastructure investment were the strongest sectors, which reflected the government's attempts to promote growth through fiscal policy.
Private sector investment, on the other hand, grew slowly in Q1, rising just 0.6%.
Retail sales, exports, and infrastructure investment were the strongest sectors, which reflected the government's attempts to promote growth through fiscal policy.
Private sector investment, on the other hand, grew slowly in Q1, rising just 0.6%.
15/ 🔴Export
Due to the deterioration of the global economy and the possibility of recession in important markets, China's once strong export growth may be slowing.
March showed improvements in the retail sector, but the sluggish housing market could impact negatively.
Due to the deterioration of the global economy and the possibility of recession in important markets, China's once strong export growth may be slowing.
March showed improvements in the retail sector, but the sluggish housing market could impact negatively.
16/
🟢Industrial Production
China's industrial production grew modestly, with automotive sector being the only bright spot.
🟢Fixed asset investment
Grew in the manufacturing sector, but fell in the property sector. Home sales were down, but home prices have started to recover.
🟢Industrial Production
China's industrial production grew modestly, with automotive sector being the only bright spot.
🟢Fixed asset investment
Grew in the manufacturing sector, but fell in the property sector. Home sales were down, but home prices have started to recover.
17/ While China's economic growth is rebounding, there are still challenges ahead. It remains to be seen whether the government's efforts to boost growth through fiscal policy will be successful in the long term, especially in the face of a weakening global economy.
18/ 3️⃣ Shifting trade patterns and the impact on economic stability
19/ 🔴Fragmentation
Rising fragmentation of the global economy is alarming.
Dominating actions by powerful nations such as protectionist measures, industrial strategies to support domestic manufacturing, limitations on technology exports to China are to blame for this.
Rising fragmentation of the global economy is alarming.
Dominating actions by powerful nations such as protectionist measures, industrial strategies to support domestic manufacturing, limitations on technology exports to China are to blame for this.
20/ This fragmentation poses the danger of reducing trade and investment, an inefficient supply chains, reducing innovation and increase productivity.
We don't want to see a situation of armed confrontation.
We don't want to see a situation of armed confrontation.
21/ Emergence of a new economic superpower?
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@rektdiomedes
@milesdeutscher
@ThHappyHawaiian
@Bernin1001
@_MacroaIfs_
@563defi
@Deebs_DeFi
@0xSalazar
@CryptMoose_
@DAdvisoor
@insomniac_ac
@matrixthesun
@CryptoShiro_
@0xsurferboy
@_FabianHD
@OnChainWizard
@CoinNotes_io
@0xYugiAI
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