A brief analysis of import and export data from January to February: a comprehensive upward revision of export forecasts: a mirror image of US stagflation – yqqlm

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Excluding the effect of the early Spring Festival weakening exports in February, exports from January to February increased by 21.2% year-on-year, and the growth trend was further stronger than that in 21Q4. This is actually a strong export data at the beginning of the year. Exports (in USD) in January-February were 16.3% yoy, exceeding our expectation of 12.5% ​​and down 4.6 percentage points from December. It should be noted that my country’s exports have been significantly affected by the dislocation of the Spring Festival, especially after the holiday, industrial enterprises have gradually resumed work, which lasts for about a month. Since this year’s Spring Festival was on February 1, the resumption of work and exports of industrial enterprises were weak throughout February this year, while last year’s Spring Festival was on February 12, so last year’s weak period was from the second half of February to the first half of March. The dislocation effect of this year’s Spring Festival makes the total export reading in January-February significantly lower than the true trend, and correspondingly, the export reading in March will also rebound significantly.based onShenwan HongyuanThe macro research team has long been leading the quantitative Spring Festival factor adjustment model. We calculated that the exports (in US dollars) from January to February after excluding the Spring Festival effect this year were as high as 21.2% year-on-year, and the three-year average growth rate was as high as 16.0%, respectively higher than 21%. In December 2018, exports increased by 0.3 and 0.5 percentage points, which is indeed a strong export performance.

The spiral of “inflation expectations-wage-inflation” in the United States has intensified. The structure of higher wage growth and inflation driven by durable consumer goods continues to deepen, which means that the overheated consumer demand for goods in the United States continues to drive my country’s exports and continue to perform super-strong.

Export forecasts raised across the board: a mirror image of US stagflation. The high growth of exports at the beginning of the year (the trend after excluding the effect of the Spring Festival) made us systematically reflect on whether there should be a significant adjustment to our previous concerns about the sharp decline in export growth in the second quarter. In fact, the main reason why we were worried that exports in the second quarter may decline faster is that after the Fed accelerates the operation of raising interest rates and shrinking its balance sheet, it may soon form an effective inflation suppression effect, which is expected to block US residents sooner. The long-term inflation expectations of the United States have dissipated the “inflation expectations-wage-inflation” spiral currently shrouding the US economy.However, since the end of the US federal government’s additional unemployment benefits program in September 2021, on the one hand, we have seen US core inflation continue to rise (by December 2022 core inflationCPI It has already reached 6.0% year-on-year), which intensifies the demand for wage growth caused by the long-term inflation expectations of US residents. It is also observed that the high income growth of US residents continues and the demand for durable consumer goods is still in an obvious overheating channel. The recent conflict between Russia and Ukraine has triggered sanctions against Russia by major developed economies in the United States and Europe, and the sharp increase in the uncertainty of global crude oil supply has deepened the degree of stagflation in the United States. The previously established path of hawks raising interest rates and shrinking the balance sheet just highlights the difficulty of this round of Fed curbing inflation expectations, which may be close to the level of Volcker’s tenure in 1979-1981. Thus we draw a systemic new conclusion: the more the Fed raises interest rates this year to curb long-term inflation expectations, the more serious the U.S. economy is currently trapped in an “inflation expectations-wage-inflation” spiral. This means that the purchasing power of the excess commodity consumption demand of American residents will not be significantly suppressed in the short term, which means that the high growth of China’s exports will last longer. This has become a very important reason why the domestic demand policy, especially the consumption policy, has shown a rather restrained attitude after the two sessions.

At present, we have decided to significantly increase the year-on-year growth rate of my country’s exports (in US dollars) to 15%, which is 9 percentage points higher than the previous expectation. Among them, the year-on-year growth rate of exports can be expected to reach 30% in March.This means that the necessity for my country to introduce direct consumption-driven policies has dropped significantly this year, so we have also initially revised down the whole year.The total retail sales of social consumer goodsThe year-on-year growth rate is forecast to be 5.0%. It should be noted that under this structure, the possibility of approaching the annual economic growth target of 5.5% is increasing rather than decreasing. We have higher expectations for the strength of this year’s economic growth driven by external demand.

(Article source: Shanghai Shenyin Wanguosecuritiesgraduate School)

Article source: Shanghai Shenyin & Wanguo Securities Research Institute

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Original title: A brief analysis of import and export data from January to February: a comprehensive increase in export forecasts: a mirror image of US stagflation