China’s July disappoints

China’s July data dump is in and this an economy going nowhere fast.

Year on year Industrial Production came in at 9.2%. That is down from growth of 9.5% in June and a big miss to consensus which saw 9.7%.

The Fixed Asset Investment component came in at 20.4% year on year, the same as last month and a miss of 0.2% on consensus.

Retails sales did better only falling 0.2% to year on year growth of  14.2% and well above consensus of 13.5%.

Combine these with this morning’s steeply deflationary PPI and I conclude that this economy will not be so easy to turn around.

The dollar, of course, ignored it all, and so did stocks by and large.  In this environment,  the persistent weakness in iron ore makes perfect sense and on these numbers is not over.

David Llewellyn-Smith
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  1. How do these expectations work. The market always moves up or down depending on how actual data compares to them but does it move beforehand? The market seems quite dumb to move up or down so much based on them when the difference is minimal.

    What is to stop estimates being ridiculously low so that the actual data always beats? Would market be fooled?

  2. This will be a case of positive negative news. Lower growth/production/inflation/sales – just means they have more room to ease!

  3. Consensus — as always if the numbers don’t agree with a mean of surveyed pundits it is the entity that has performed poorly not the pundits — they are bullet proof. And as always no standard deviation among cited pundit numbers making the use of these comparisons even more useless. Seriously this is just handle cranking stuff that we expect from MSM and dads army. Don’t you want to be better than that?

    Finally Mr Holes, maybe take a walk, have a breath of fresh air and then come back and ask yourself whether describing Industrial Production 9.2% YOY growth, FAI 20.4% YOY growth, and Retail sales 14.2% YOY growth as indicative of an “economy going nowhere fast” makes any sense whatsoever. You’re desire to use hyperbowl rather than objective analysis is not helping MB differentiate itself from competitors.

  4. The one thing that doesn’t appear to have occurred is rising unemployment, so perhaps these lower numbers are all that is required. I can’t believe the expected shortage of 15-25 year olds is finally playing a part so quickly.

  5. HnH,

    Are these numbers indicating the much discussed rebalancing of China’s economy is underway?