China Economic Weakness

May wasn’t a good month for China. Industrial output rose 5% from a year earlier but slower than the 5.4% in April. Also lower than the 5.5% forecast.

“In the first five months, the investment in fixed assets (excluding rural households) was 21,755.5 billion yuan, a year on year growth of 5.6 percent, or 0.5 percentage point lower than that of the first four months. Specifically, private investment reached 13,082.3 billion yuan, up by 5.3 percent.”

The forecast for fixed asset investment was 6.1%, significantly higher than the 5.6% reported.

“In May, the total retail sales of consumer goods reached 3,295.6 billion yuan, a year on year growth of 8.6 percent, 1.4 percentage points higher than that of last month. Analyzed by different areas, the retail sales in urban areas reached 2,830.4 billion yuan, up by 8.5 percent year on year, and the retail sales in rural areas stood at 465.2 billion yuan, up by 9.0 percent. Grouped by consumption patterns, the income of the catering was 363.1 billion yuan, up by 9.4 percent; and the retail sales of goods were 2,932.4 billion yuan, up by 8.5 percent. The retail sales of cosmetics, beverages, articles for daily use and traditional Chinese and Western medicine by businesses above the designated size grew by 16.7 percent, 12.7 percent, 11.4 percent and 11.2 percent year on year respectively, or 8.1 percentage points, 4.1 percentage points, 2.8 percentage points and 2.6 percentage points higher than the total retail sales of consumer goods.”

Retail sales was a bright spot, 8.6% beating forecasts of 8.2%. So China is still consuming despite the trade war.

“In the first five months, the newly increased employed people in urban areas numbered 5.97 million[roughly the population of Colorado], accounting for 54 percent of the whole-year target. In May, the surveyed urban unemployment rate was 5.0 percent, the same as that of last month. Specifically, the surveyed unemployed rate for population aged from 25 to 59 was 4.5 percent, 0.2 percentage point lower than that of last month, declining for three consecutive months. The urban surveyed unemployment rate in 31 major cities was 5.0 percent, the same as that of last month. The employees of enterprises worked averagely 46.3 hours per week, an increase of 0.5 hour year on year.”

Unemployment remained steady at 5%.

Quotes are from the National Bureau of Statistics of China