As a reminder ahead of tonight's August data, the latest official composite purchasing manager's index fell to the lowest since February 2020, its first contraction after the virus lockdowns, signaling China's robust economic recovery from last year's coronavirus trough is losing momentum.
Industrial Production YTD YoY MISSED at +13.1% vs +13.5% exp DOWN from +14.4% prior
Retail Sales YTD YoY MISSED at +18.1% vs +18.9% exp DOWN from +20.7% prior
Fixed Asset Investment YTD YoY MISSED at +8.9% vs +9.0% exp DOWN from +10.3% prior
Property Investment YTD YoY MISSED at +10.9% vs +11.3% DOWN from +12.7% prior
Surveyed Jobless Rate IN LINE at 5.1% vs 5.1% exp IN LINE with 5.1% prior
Perhaps most notably, year-over-year retail sales rose just 2.5% in August, dramatically worse than the +7% expected and well below the +8.5% in July...
Retail weakness was most pronounced in communication appliances, clothing, household electronics, automobiles and eating out; and as Bloomberg's Kevin Kingsbury notes, retail sales data are liable to be worse for September (and possibly October) as folks are apt to stay home during the upcoming holidays.
Notably, the PBOC rolled over 600 billion yuan of funding in a move that signals Beijing is keeping liquidity levels amid the slowdown. The question is, with China's credit impulse is at its most contractionary in 3 years, is this the turning point once again?