US banks reported tight lending standards and weak demand for loans in the third quarter, according to the Federal Reserve’s senior loan officer opinion survey (or “SLOOS”). But it wasn’t all bad news: the trend across both measures actually showed some improvement compared with the prior three-month period. Once the darling of the startup world, WeWork threw in the towel last week, filing for bankruptcy protection. The firm known for revolutionizing office work had boasted coworking spaces on seemingly every desirable street and a valuation of $47 billion. But the company was soon weighed down by colossal losses and its disaster of an initial public offering. Expensive leases, signed before the pandemic, and the habit-changing effects of working from home piled $19 billion of debt on WeWork and sent profit firmly into the red. The British economy flatlined in the third quarter, registering zero growth compared to the quarter before, with weaker spending by consumers, businesses, and the government offset by stronger trade activity. While this outcome was marginally more encouraging than the 0.1% drop forecast by economists and reduced the likelihood of a recession in 2023, it also points to an extended period of economic stagnation for the country – one exacerbated by higher interest rates. The IMF delivered a sunnier outlook for China’s economic growth for this year and next, encouraged by stronger support from the government, but it warned that property sector weakness and muted external demand would persist. The fund now sees China’s economy expanding by 5.4% this year and 4.6% in 2024, up from previous estimates of 5% and 4.2%, respectively. Longer term, it sees growth gradually sliding to about 3.5% by 2028, because of weak productivity and an aging population. Chinese imports rose 3% in October from a year ago, marking the first gain in eight months and defying forecasts for a drop. Exports, on the other hand, dramatically fell by 6.4% – far worse than the 3% drop that analysts had projected. It was the sixth consecutive decline for exports and came as a big disappointment: the period was expected to compare favorably to October of 2022, which faced pandemic-related disruptions in logistics and production. China’s latest monthly consumer price index, meanwhile, showed that the world’s second-biggest economy slid back into deflation in October, highlighting the country’s struggles in shoring up growth by boosting domestic demand. After remaining virtually flat in August and September, consumer prices fell by a more-than-expected 0.2% last month, compared to a year ago. What’s more, producer prices – which reflect what factories charge wholesalers for things – fell for a 13th straight month, dropping a steeper 2.6%. |
