China released activity data for August on Monday and it missed across the board.
Last month, the numbers for July showed industrial output rising just 4.8% YoY, missing estimates of 6%, and representing the slowest pace of growth in 17 years.
It appears to have gotten worse in August. Consensus was looking for a rebound to a 5.2% YoY gain, but that didn’t pan out. Rather, industrial production rose just 4.4%, missing the lowest estimate from 34 economists.
January-August fixed asset investment missed as well, printing 5.5% YoY, matching the lowest estimate and coming in below consensus, which was looking for 5.7%.
As for retail sales, they missed too, rising just 7.5% YoY last month, well below the 7.9% the market was hoping to see and printing at the low end of the range (7.2% to 8.3%).
The surveyed jobless rate ticked down to 5.2% from 5.3% in July.
At first glance, this doesn’t bode well, as it appears to suggest that the Chinese economy continued to decelerate ahead of the imposition of new tariffs by the Trump administration on September 1.
This comes on the heels of data showing an unexpected contraction in exports for August, and ahead of trade talks between Liu He, Bob Lighthizer and Steve Mnuchin early next month.
Separately (or not, depending on how you want to look at it), Chinese Premier Li Keqiang told Russian media that it’s “very difficult” for the world’s second-largest economy to maintain a 6% growth rate.
“For China to maintain growth of 6% or more is very difficult against the current backdrop of a complicated international situation and a relatively high base, and this rate is at the forefront of the world’s leading economies”, he said, perhaps presaging more underwhelming data.
China’s latest RRR cut goes into effect on Monday, with additional easing for city commercial banks scheduled for October 15 and November 15.