China Industrial Production and Retail Sales Exceeded Expectations in August
China's industrial output and retail sales grew more than expected in August, data released on Friday showed, indicating that the recovery in certain areas of the economy continued steadily despite the headwinds from new COVID-related restrictions.
Data from the National Bureau of Statistics showed that output at China's factories rose 4.2% in August, exceeding the previous month's growth of 3.8%. The figure also beat growth forecasts of 3.8%.
The jump in industrial output came as factories in centers such as Shanghai ramped up activity to make up for a shortfall seen earlier this year due to COVID-related lockdowns.
A separate report showed that Chinese retail sales rose 5.4% in August, the fastest pace of growth in six months. It also beat expectations for growth of 3.5%.
The figures show that activity in China's main economic centers has steadily recovered after most COVID-related restrictions were lifted earlier this year. Retail sales also appear to be benefiting from pent-up demand and an improving job market.
China's unemployment rate fell slightly to 5.3% in August from 5.4% in the previous month.
The positive data also reflects the effects of the stimulus measures introduced in the last two months to revive economic growth. China has pledged to increase spending in the third quarter to support the economy.
The data comes at a time when sentiment towards the Chinese economy is at multi-year lows, largely due to Beijing's strict zero COVID policy.
China introduced new COVID-related restrictions in several regions last month and has refused to abandon a policy that has brought economic growth to a standstill this year.
Friday's data follows last month's PMI readings, which showed manufacturing activity contracted for a second straight month in August. China's trade surplus also fell to a three-month low during the month as overseas and domestic demand remained weak.
Despite the positive data in August, China's economy has a long way to go to recover. Investors are wary of the risks to economic growth from further COVID outbreaks as well as a struggling property market.
Data released earlier on Friday showed that house prices in China fell 1.3% in August from a year earlier.
The Chinese yuan reacted slightly positively to Friday's data, paring some early losses. However, the currency fell below the psychologically important level of 7 against the dollar.
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