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Hong Kong CNN —The Chinese economy has slipped into deflation, with consumer prices falling for the first time in more than two years in another sign of weakening demand. The consumer price index (CPI) fell by 0.3% in July from a year ago, according to China’s National Bureau of Statistics on Wednesday. The producer price index (PPI), which measures goods prices at the factory gate, also dropped by 4.4% in July from a year earlier. Signs of deflation have become more prevalent in the world’s second biggest economy in recent months, sparking concerns that China could enter a prolonged period of stagnation. China is also suffering from a prolonged slump in its real estate sector, and weak trade.
Persons: That’s Organizations: Hong Kong CNN, National Bureau, Statistics Locations: Hong Kong, China
The consumer price index fell by 0.3% in July from a year ago, but was up by 0.2% when compared with June, according to the National Bureau of Statistics Wednesday. The year-on-year CPI print for July was slightly better than expectations for a 0.4% decline, according to analysts polled by Reuters. It was still the first year-on-year decline since early 2021, according to official data accessed via Wind Information. The producer price index fell by 4.4% in July from a year ago, better than the 5.4% decline in June, the data showed. However, the year-on-year PPI read was worse than the 4.1% forecast by a Reuters poll.
Persons: Zhiwei Zhang Organizations: National Bureau, Statistics, Reuters, Information, CPI, PPI Locations: BEIJING, China
But falling prices there could end up being good news for the rest of the world. However, falling prices there aren't necessarily bad news for everyone else. In China, prices are falling rather than risingData from the National Bureau of Statistics published Wednesday showed China's factory-gate prices, as measured by the producer price index, plunging 4.4% year-on-year in July for a tenth straight month of declines. Falling prices in the world's second-biggest economy could "give central bankers in the US, UK and Europe pause for thought when they weigh up their next steps," according to AJ Bell investment director Russ Mould. So deflation in China might end up being bad news for Beijing – but a blessing in disguise for the rest of the world.
Persons: it's, China's, Hargreaves Lansdow n's, Steve Lansdown, AJ Bell, Russ Mould Organizations: Service, Privacy, Apple, Nike, Federal Reserve, National Bureau, Statistics, Beijing, Bank of England Locations: China, Wall, Silicon, Beijing, West, Saudi Arabia, Russia, Ukrainian
Pork prices are a significant driver of the consumer price index, and have fallen 26% year-on-year. Pork is the largest driver of the country's Consumer Price Index basket, comprising approximately 3% of it, per the Economist Intelligence Unit. "A rough rule of thumb is therefore that a 10% increase in the pork price will push up the CPI by 0.3%," the EIU said in a research note. The swing in pork prices over the past many years has thrown a huge challenge in front of China's hog farmers. This oversupply and resulting decline in pork prices has weighed heavily on the country's consumer price index, pushing the country into the region of deflation.
Persons: Oversupply, Xi Organizations: Service, Intelligence Unit, National Bureau, Statistics Locations: Wall, Silicon, China, Beijing
Government policymakers struggling to address the problem are now leaning on colleges to do more to find jobs for graduates. The job performance of school administrators was already tied to the percentage of their students who find employment after graduation. In some cases, the scrutiny is so intense that students resort to fabricating job offers to placate school officials. Over the last three decades, as China’s economy grew by leaps and bounds, more people attended college, seeing it as a pathway to promising careers. This year’s estimated graduating class of 11.6 million students is expected to be the largest ever, and future classes are expected to be even bigger.
Organizations: National Bureau of Statistics, China Macroeconomy, Renmin University of China Locations: China
CNN —Days of heavy rain have caused severe flooding in China’s leading grain-producing region in the northeast, killing 14 people and raising concerns about food security as floodwater inundated farmlands. As the storm moved further north, another 14 deaths were reported Sunday in the city of Shulan in Jilin province. Firefighters operate a drainage machine near a village in the city of Mudanjiang in northeastern China's Heilongjiang province on August 5. A cornfield is submerged by floodwater in a village in Hebi city, Henan province on August 5. A flooded farm in Xinxiang city, Henan province on August 5.
Persons: Doksuri, Zhang Tao, floodwater, Typhoon Khanun, Xi Jinping Organizations: CNN, Xinhua, Firefighters, China’s Ministry of Water Resources, Communist Party, Ministry of Agriculture, Rural Affairs, National Bureau of Statistics, China Meteorological Administration, Qiushi, Communist Locations: China, Beijing, Hebei, Shulan, Jilin province, Heilongjiang, Mudanjiang, China's Heilongjiang, Jilin, Harbin, Shangzhi, Wuchang, Liaoning, Hebi city, Henan province, Henan, Xinxiang city
But aside from simply skirting a recession, it’s not obvious what the economy would look like in a soft landing. And who even declares that the Fed has officially defied the odds and achieved a soft landing? The main aspect of a soft landing, according to economists, is the absence of a recession, which is determined by the National Bureau of Economic Research (NBER.) In a soft landing, the job market has to remain intact. The other key feature of a soft landing is for the Fed to successfully control inflation, but that’s open to some interpretation.
Persons: we’ve, , Kayla Bruun, , Julia Pollak, ” Pollak, Josh Markman, cooldown, Austan Goolsbee, ” Goolsbee, Raphael Bostic, Michelle Bowman, Patrick Harker, Armour, Ralph Lauren Organizations: CNN Business, Bell, DC CNN, Federal Reserve, Bank of America, Fed, National Bureau of Economic Research, Morning, Atlanta, ZipRecruiter, Labor, Bel Air Investment Advisors, Federal, Federal Reserve Bank of Chicago, Bloomberg, Atlanta Fed, , Tyson Foods, UPS, Fox, Restaurant Brands, The National Federation of Independent Business, US Commerce Department, China’s National Bureau of Statistics, Disney, US Labor Department, National Statistics, University of Michigan Locations: Washington
REUTERS/Daniel Munoz/file photoSYDNEY, Aug 3 (Reuters) - Australian retail sales volumes fell again in the June quarter as cost of living pressures and rising borrowing costs ate into consumer spending power, hampering economic growth and weakening the case for further interest rate hikes. Data from the Australian Bureau of Statistics on Thursday showed real retail sales fell 0.5% in the second quarter to A$35.2 billion ($23.02 billion), matching analyst forecasts. "The widespread fall in sales volumes reflects what retailers have been telling us about consumers focusing on essentials, buying less or switching to cheaper brands," said Ben Dorber, ABS head of retail statistics. Since sales account for around 17% of gross domestic product, the drop will weigh on economic activity and analysts expect barely any growth in the quarter. Thursday's data showed retail prices rose 0.9% in the second quarter, up from 0.7% the previous quarter.
Persons: Daniel Munoz, Ben Dorber, Alan Oster, Oster, Wayne Cole, Muralikumar Anantharaman, Simon Cameron, Moore Organizations: REUTERS, Australian Bureau, Statistics, Reserve Bank of Australia, NAB, Thomson Locations: Sydney's, Australia
"You're too old to work at 35, but too young to retire at 60," one person wrote, bemoaning the "curse." It refers, specifically, to the typical Chinese employer's preference for hiring workers who haven't reached the sell-by date of their 35th birthday. And it's not just about finding work — Chinese workers being phased out at what was previously viewed as the prime of their careers means their livelihoods could be seriously affected. "At this point in time, youth unemployment is high, so many young workers are willing to work for less. Seah told Insider that increased competition for younger workers "will eventually drive up youth wages, making them relatively more expensive to hire."
Persons: haven't, Hector Retamal, Huang, Tania Lennon, Lennon, I, Kevin Frayer, workhorses, Kelvin Seah, Seah, aren't, National University of Singapore's Seah Organizations: Twitter, Service, Getty, Peterson Institute for International Economics, International Institute for Management Development, China Initiative, Bureau of Statistics, National University of Singapore, National Bureau of Statistics, Employers, National University of Singapore's Locations: China, Wall, Silicon, Weibo, Beijing, AFP, Quy Huy
Chinese developers are allowed to sell residential projects before completion but are required to put those funds in escrow accounts. Local city governments permit them to withdraw a portion of the funds, depending on the progress of construction. China's housing ministry did not respond to Reuters request for comment on the tightening of developers' access to escrow funds. FALTERING HOUSING DEMANDThe new measures come as property demand is sluggish - China's property sales between May and June showed the largest monthly drop this year, based on sales by floor area, and investment in property also slumped. Under those rules, the authority has asked the bank to make escrow funds available only to developers who have other sources of funding to cover construction costs, said the person.
Persons: Gary Ng, Ng, Clare Jim, Tang, Sumeet Chatterjee, Muralikumar Organizations: Asia Pacific, National Bureau of Statistics, Thomson Locations: HONG KONG, BEIJING, Asia, Hunan, Hefei, Xiamen, Hong Kong, Beijing
(Photo by He Shaoping/VCG via Getty Images)Asia-Pacific markets rose on Monday as China's factory activity for July remained in contraction territory for the fourth straight month. The official manufacturing purchasing managers index came in at 49.3, higher than June's figure of 49.0, according to the national bureau of statistics. The PMI for non-manufacturing activity came in at 51.5, a slower rate of expansion compared to the 53.2 in June. Hong Kong's Hang Seng index surged over 1.71%, while the Hang Seng Tech index saw a larger climb of 4.84%. The country's industrial output for June came in lower than expected, registering a 2% growth month on month compared to the 2.4% expected by economists.
Persons: Hong, HSI, Australia's Organizations: Getty Images, PMI, Hang Seng, Shanghai, Shenzhen, Nikkei, Reserve Bank, Reuters Locations: SHENZHEN, CHINA, Shenzhen, Guangdong Province of China, Asia, Pacific
BEIJING, July 31 (Reuters) - China's manufacturing activity fell for a fourth straight month in July while the services and construction sectors teetered on the brink of contraction, official surveys showed on Monday, threatening growth prospects for the third quarter. Construction sector activity for July was its weakest since COVID-19-related workplace disruptions dissipated around February, data from the National Bureau of Statistics showed. The non-manufacturing PMI, which incorporates sub-indexes for service sector activity and construction, dropped to 51.5 from June's 53.2. "Meanwhile, we're seeing improvements in inventory levels, suggesting that with destocking nearing its end, China's manufacturing sector bottomed out in the second quarter," he added. "Unless concrete support is rolled out soon, the recent downturn in demand risks becoming self-reinforcing."
Persons: Xu Tianchen, Julian Evans, Pritchard, Joe Cash, Sam Holmes, Edmund Klamann Organizations: National Bureau, Statistics, Communist Party, PMI, Economist Intelligence Unit, destocking, China, State, Capital Economics, Thomson Locations: BEIJING, China
Hong Kong CNN —China is preparing to announce new stimulus for its stumbling economy after the vast factory sector contracted for a fourth straight month, and a gauge of activity in its services sector slipped to a seven month low. The official manufacturing Purchasing Managers’ Index (PMI), which measures activity level in the manufacturing sector, came in at 49.3 in July, according to data released by the National Bureau of Statistics on Monday. That result was slightly up compared with 49 in June but the index has nonetheless contracted each month since April. The official non-manufacturing PMI, which looks at activities in the services and construction industries, fell to 51.5 from 53.2 in June. “China’s official PMI data provides little encouragement that the economy is turning the corner,” said Robert Carnell, regional head of research for Asia-Pacific at ING Group.
Persons: Stringer, , , Robert Carnell, Xi Jinping, Carnell Organizations: Hong Kong CNN, National Bureau, Statistics, PMI, Getty, ING Group, National Development, Reform Commission, Ministry of Industry, Information Technology, State, Information, Ministry of Commerce, Capital Economics Locations: Hong Kong, China, Beijing, Hangzhou, China's, Zhejiang, AFP, Asia, Pacific
The sunset glow is seen over buildings and a ferris wheel on May 13, 2022 in Beijing, China. China's factory activity contracted for a fourth consecutive month in July, while non-manufacturing activity slowed to its weakest this year as the world's second-largest economy struggles to revive growth momentum in the wake of soft global demand. The official manufacturing purchasing managers' index came in at 49.3 in July — compared with 49.0 in June, 48.8 in May and 49.2 in April — according to data from the National Bureau of Statistics released on Monday. Monday's figures also showed China posting its weakest official non-manufacturing PMI reading this year, coming in at 51.5 in July — compared with 53.2 in June, 54.5 in May and 56.4 in April. A PMI reading above 50 points to an expansion in activity, while a reading below that level suggests a contraction.
Persons: Zhao Qinghe Organizations: National Bureau of Statistics, PMI, NBS Locations: Beijing, China
BEIJING, July 27 (Reuters) - China's industrial profits extended this year's double-digit pace of declines into a sixth month as waning demand took a toll on companies' profit margins, bolstering the case for more supportive policy to help the economy. In June alone, industrial earnings shrank by 8.3% from a year earlier, according to data from the National Bureau of Statistics (NBS) on Thursday. Profits dived for 29 of 41 major industrial sectors during the period, with the ferrous metal smelting and rolling processing industry reporting the deepest slump at 97.6%. "Looking ahead, there's a big chance of China's industrial profits logging positive growth in 2024, said Zheng Houcheng, chief macro economist at Yingda Securities Co, attributing the turnaround in part to expectations for ramped-up stimulus. Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.79 million) from their main operations.
Persons: Sun Xiao, there's, Zheng Houcheng, Ethan Wang, Qiaoyi Li, Ryan Woo, Jacqueline Wong Organizations: National Bureau of Statistics, Reuters Graphics, NBS, Yingda Securities, ramped, People's Bank of China, Thomson Locations: BEIJING
Slowing Australia Q2 inflation lessens rate hike pressure
  + stars: | 2023-07-26 | by ( Stella Qiu | ) www.reuters.com   time to read: +3 min
In the first quarter, inflation was at 1.4%. That was balanced by a sharp fall in goods inflation, which slowed to an annual rate of 5.8% from 7.6% the quarter before. Adelaide Timbrell, senior economist at ANZ, said both headline and trimmed mean inflation are tracking below the RBA's forecast for the second quarter. "(The data) highlight that a 4.1% cash rate may be restrictive enough to bring inflation down. The RBA has warned that some further tightening may be required to bring inflation to heel.
Persons: Robert Carnell, Carnell, Adelaide Timbrell, Stella Qiu, Wayne Cole, Jacqueline Wong Organizations: Reserve Bank of Australia, Australian Bureau, Statistics, Wednesday, ING, ANZ, Thomson Locations: SYDNEY, Asia, Pacific
LAUNCESTON, Australia, July 26 (Reuters) - China boosted its stockpiling of crude oil to the highest level in three years in June, taking advantage of cheap Russian crude to bolster inventories and add flexibility to future import requirements. The volume of crude available to refiners was 16.93 million bpd, consisting of imports of 12.67 million bpd and domestic output of 4.26 million bpd. This would have the impact of lowering their import bills, but also of cutting global oil demand and putting some downward pressure on oil prices. What is becoming clearer is that the amount of heavily discounted crude China can buy is reaching a maximum. In addition to discounted Russian oil, China also buys crude from Iran, although this is largely disguised as imports from other nations in official data.
Persons: China doesn't, Jamie Freed Organizations: National Bureau of Statistics, International Energy Agency, Brent, Reuters, Thomson Locations: LAUNCESTON, Australia, China, OPEC, Saudi Arabia, Russia, Iran, Ukraine
China's youth unemployment rate may be severely skewed, a Peking University professor wrote. While official statistics for March cited a 19.7% rate, Zhang Dandan estimated it's closer to 46.5%. According to Zhang Dandan, whose findings were recently published in the financial magazine Caixin, March's youth unemployment rate could have been as much as 46.5% when accounting for 16 million non-students not actively seeking work, Reuters reported. This is more than double that month's official 19.7% rate, as published by the National Bureau of Statistics. To be sure, the US Labor Department's unemployment rate doesn't include Americans who have stopped looking for work.
Persons: Zhang Dandan, COVID Organizations: Peking University, Service, Reuters, National Bureau of Statistics, US Labor Locations: Wall, Silicon
Construction on a real estate project in Yantai, Shandong province, gets under way on July 8, 2023. Nurphoto | Nurphoto | Getty ImagesBEIJING — China is changing its tone on the struggling real estate sector, paving the way for policy support. The statement reflects a "much clearer understanding about the seriousness of the situation," said Qin Gang, executive director of China real estate research institute ICR. He expects policies beneficial to the real estate market and consumption will come out in coming days. So far, the biggest real estate policy change has been this month's extension of measures to support developers, which were first revealed in November.
Persons: Larry Hu, Hu, Qin Gang, Ricky Tsang, China's, Tsang, It's, Zong Liang, Zong, Tommy Wu, Wu Organizations: Nurphoto, Getty, CNBC, Macquarie, People's Bank of China, Qin, Seng Property Development, National Bureau of Statistics, Bank of China Locations: Yantai, Shandong province, BEIJING, China
BEIJING, July 25 (Reuters) - Several Chinese steel mills have received instructions to cap this year's output at the same level as 2022, five people familiar with the matter and analyst reports said on Tuesday, potentially curbing iron ore demand in the world's top steel market. China has mandated zero output growth in its steel sector for the last two years as it seeks to limit carbon emissions by one of its most polluting industries. China's state planner did not respond to a fax seeking comment on the caps issued at some steel mills. Some mills in the northern Chinese city of Tianjin were notified to keep steel output below the 2022 level, according to reports by local consultancies Mysteel and Fubao on Tuesday, which did not specify the number of mills. However, a dozen mills in northern Chinese cities including Tianjin and Handan contacted by Reuters said they had not yet received any instructions to cap their output.
Persons: Dominique Patton, Chizu Organizations: China Baowu Steel Group, Shanghai Metals, Reuters, Shanghai Futures Exchange, National Bureau, Statistics, Thomson Locations: BEIJING, China, Tianjin, Fubao, Shanghai, Handan, Beijing
The last time there was a major slowdown in the mighty network of ocean currents that shapes the climate around the North Atlantic, it seems to have plunged Europe into a deep cold for over a millennium. That was roughly 12,800 years ago, when not many people were around to experience it. A pair of researchers in Denmark this week put forth a bold answer: A sharp weakening of the currents, or even a shutdown, could be upon us by century’s end. It was a surprise even to the researchers that their analysis showed a potential collapse coming so soon, one of them, Susanne Ditlevsen, a professor of statistics at the University of Copenhagen, said in an interview. Climate scientists generally agree that the Atlantic circulation will decline this century, but there’s no consensus on whether it will stall out before 2100.
Persons: Susanne Ditlevsen Organizations: University of Copenhagen Locations: Europe, Denmark
Sustained growth in Australia's electricity demand has in turn meant that power producers must continue to heavily rely on coal for electricity generation on top of recent additions in supply of renewable energy sources. Even so, electric vehicles accounted for only 5.1% of total Australian car sales in 2022, according to the International Energy Agency (IEA). Heating and cooling for homes and businesses is another major energy demand driver in Australia, and accounts for roughly 40% of total electricity use in the country. To alleviate any potential power shortages Australian utilities are expected to continue rolling out more renewable energy supply capacity, likely at an accelerating pace. However, Australian power producers look set to remain substantially reliant on coal for baseload electricity generation for years, if not decades, more.
Persons: Gavin Maguire Organizations: International Energy Agency, Australian Bureau of Statistics, European Union, EV, New South, RENEWABLES, South, Reuters, Thomson Locations: Australia, France, Germany, Japan, United Kingdom, New Zealand, New South Wales, Oceania and Pacific, South Korea
ReutersBEIJING – International investment firms have changed their China GDP forecasts nearly every month so far this year, with JPMorgan making six adjustments since January. Here are some winners to watch The U.S. investment bank most recently cut its China GDP forecast in July to 5%, down from 5.5% previously. In June, the World Bank raised its forecast for China's growth this year to 5.6%, up from 4.3% previously. The International Monetary Fund in April raised its forecast for China's GDP to 5.2%, up from 4.4% previously. Among the six investment firms CNBC looked at, the highest China GDP forecast so far this year was JPMorgan's 6.4% figure — when the bank adjusted for the second time in April alone.
Persons: Morgan Stanley, Nomura, Goldman Sachs, Logan Wright, Shehzad Qazi, Qazi Organizations: Reuters, Reuters BEIJING – International, JPMorgan, CNBC, Citi, Beijing, Citi's, UBS, National Bureau, Statistics, U.S, Chinese Communist Party . Investment, Bank, International Monetary Fund, Monetary Fund Locations: Lianyungang, Jiangsu province, China, Reuters BEIJING, U.S, Beijing, New York
China's youth unemployment problem is the root of its economic woes, according to economist Nancy Qian. That's largely due to a shortage of high-skill, high-paying jobs, which will weigh on its economy. That's largely been driven by the lack of high-skill and high-paying jobs in China's employment market, which have left many college graduates unable to find work. Meanwhile, China's economy has been slowing, with the nation seeing a disappointing economic revival since dialing back its zero-COVID policies at the start of this year. But current patterns raise profound concerns for China's economic outlook, especially considering that the government's policies for addressing them have not worked," Qian said.
Persons: Nancy Qian, That's, Qian, It's, that's Organizations: Service, Northwestern University, Project Syndicate, National Bureau of Statistics, Monetary Fund Locations: Wall, Silicon, China
Australia jobs jump again, heaping pressure on RBA
  + stars: | 2023-07-20 | by ( ) www.reuters.com   time to read: +3 min
The jobless rate held at a downwardly revised 3.5%, when analysts had expected 3.6%, leaving it just above the 3.4% trough from October last year. Markets moved to priced in a 42% probability that the Reserve Bank of Australia (RBA) would resume hiking rates in August, compared with 35% before the jobs data. Incoming RBA Governor Michele Bullock has said the jobless rate would need to rise to about 4.5% to curb inflation. "The hotter-than-expected jobs numbers... leave no room whatsoever for an upside surprise in next Wednesday's Q2 CPI data. However, pressure on the RBA to keep pace with its overseas counterparts on rate hikes has eased somewhat in recent weeks.
Persons: Michele Bullock, Tony Sycamore, Marcel Thieliant, Stella Qiu, Wayne Cole, Jacqueline Wong, Jamie Freed Organizations: SYDNEY, Australian Bureau, Statistics, Reserve Bank of Australia, Incoming, IG, Capital Economics, Reserve, European Central Bank, Bank of England, Thomson Locations: Australia
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