China’s retail sales shrink far more than expected, while industrial production disappoints

Several “robot arms” work on a final wheel assembly machine during a manufacturing workshop in Anqing city, Anhui province, China, Dec 9, 2022.

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BEIJING – China reported economic data on Thursday that missed expectations in the same month as the Covid-19 pandemic intensified.

Retail sales fell 5.9% in November from a year earlier, the National Bureau of Statistics said.

That’s worse than expectations for a 3.7% decline, according to analysts polled by Reuters, and a sharper drop than the 0.5% annual decline in October.

Industrial production grew by 2.2% in November from a year ago, missing Reuters’ 3.6% increase. The reported pace was slower than the 5% increase in October.

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Fixed income in the year to November fell to 5.3% annual growth, missing Reuters expectations for a 5.6% increase. Official printing was also down from 5.8% growth in the first 10 months of the year.

Investment in construction rebounded in November from October year-over-year, while manufacturing slowed slightly. Housing costs fell sharply amid the ongoing recession.

Slower output from China will lower commodity prices but could disrupt supply chains, Fed Chair Powell said.

The urban unemployment rate rose to 5.7% in November. The unemployment rate for young people aged 16 to 24 is still very high at 17.1%.

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The decline in retail sales brought the annual figure to 0.1% from the first 11 months of last year.

Food and medicine were the only sectors that saw sales growth in November from a year ago, according to the statistics office. Clothing and footwear saw sales decline by 15.6%.

Online sales of physical goods rose 4% year-on-year in November, the lowest since last month, according to a CNBC analysis of data obtained through Wind Information.


The change in Covid

In the past two weeks, China has lifted many of the Covid-related restrictions that have hampered domestic and business travel. Officials have confirmed vaccinations for the elderly, and are encouraging Covid patients to recover at home.

Of course, in Beijing, many people got sick, if not diagnosed with Covid, in the cold weather.

A day before the data was to be released, China’s National Bureau of Statistics canceled its Thursday press conference without explanation.

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