Column-The ultimate 2023 consensus-buster - US grows faster than China?: McGeever

investing.com:

By Jamie McGeever

ORLANDO, Florida (Reuters) — Of all the economic and market curve balls investors have had to bat away this year, few will be as unexpected as the U.S. economy growing faster than China's.

This was not how the 2023 consensus looked in January, when China was poised to break out of its COVID lockdown like a coiled spring, and the United States would buckle under the Fed's most intense rate-hiking cycle in 40 years and slip into recession.

But China is struggling to get off the ground, and the narrative around the U.S. economy is shifting, remarkably, away from a 'soft landing' towards a 'no landing' scenario.

The contrast in the fortunes of the world's two economic superpowers has been extraordinary, perhaps the starkest reminder that investors' priors, rules of thumb and models have been completely ripped up by the pandemic.

China's economy grew by just 0.8% in the second quarter from the prior three months, down from 2.2% in a first quarter that was inflated by base effects as activity resumed after lockdown restrictions were lifted in December.

The U.S. economy expanded 1.2% in the second quarter, following 1.6% growth in the first three months of the year. Hardly gangbusters, but more than comparable to a rival that should have been powering ahead.

There's little to suggest the economic dynamics are about to reverse any time soon, while tensions between the two powers over tech and cyber security, espionage and trade remain heated.

According to the Atlanta Fed's GDPNow real-time growth tracker, the U.S. economy is set to expand at a 5.8% annualized rate in the third quarter, which would be more than double the rate of annualized growth in the first and second quarters.

Meanwhile, China's growth