January 30

1/30 – U.S. GDP growth was 2.9% for Q4 2022, following 3.2% growth in Q3 2022. Those are great numbers after several years of Covid, supply shocks, war, and inflation. What’s next? The U.S. will flirt with recession for most of 2023 as a result to the Fed’s (inflation-fighting) interest rate increases. We’re only not in a recession right now because of a resilient labor market and unexpectedly lower energy prices. But new supply shocks will come from China’s reemergence, as China’s 1.4B consumers unleash some pent-up savings following 1,016 days of harsh Covid restrictions. An expected increase in Chinese crude oil imports could add $10-to-$15 per barrel to world oil prices. However, the reopening will also help labor-starved Chinese factories boost output, reduce bottlenecks, and ease some supply-chain induced inflation. It’s going to be a roller-coaster year - buckle up!