On Friday, China released retail sales and industrial production figures for September that exceeded expectations. According to the National Bureau of Statistics, retail sales increased by 3.2% compared to the previous year, surpassing analysts’ predictions of 2.5% growth based on an LSEG poll. This growth rate was also faster than the 2.1% observed in the prior month.
Additionally, industrial production saw a 5.4% expansion in September from the previous year, outpacing the anticipated 4.5% growth. From January to September, fixed asset investment rose by 3.4% compared to the same period last year.
The urban unemployment rate in China was reported at 5.1% for September, marking a 0.2 percentage point decrease from the previous month. Although these figures offer some positive indicators, Gary Ng, a senior economist at Natixis, cautioned that it is premature to declare a complete economic recovery for China. He pointed out that retail sales data for the year thus far reflect a “cautious sentiment among consumers.” The growth in retail sales from January to September was reported at 3.35%, nearly identical to the 3.36% growth for January through August.
These statistics follow a series of announcements from Chinese authorities as Beijing aims to stimulate consumption and support its real estate sector, which has been under pressure. Furthermore, China reported slightly better-than-expected gross domestic product (GDP) data for the third quarter.
Investors have been eagerly anticipating stimulus measures as economic growth in China, the world’s second-largest economy, has slowed due to challenges in recovering from COVID-19 lockdowns. The markets have experienced volatility as investors evaluate these announcements and await more details on their implementation.
Ng emphasized that the magnitude of interest rate cuts and fiscal policies would be crucial to achieving an economic rebound and restoring confidence.
