Global Economy

While China’s latest batch of economic indicators was uniformly weak, there were some upside surprises in the US and Germany. Let’s review:

(1) China. Exports, which represent about 25% of the Chinese economy and account for millions of jobs, slowed sharply in recent months. They rose just 2.7% y/y during August. Growth has been depressed by Europe’s recession and the anemic recovery in the US. An unexpectedly sharp slump in imports to China showed that domestic demand, too, had weakened. Imports fell 2.6% y/y in August.

(2) United States. Of course, Friday’s payroll employment release for August was disappointing. However, ISM’s non-manufacturing PMI rose from 52.6 in July to 53.7 in August led by a jump in its employment component from 49.3 to 53.8.

(3) Germany. Most surprising was Germany’s industrial production, which jumped 1.3% in July. It was led by a 3.8% increase in capital goods output, back toward previous record highs. On the other hand, Germany factory orders remained stalled during July, as they have been for the past year.

Today's Morning Briefing: Is China Shovel Ready? (1) Corruption and concrete. (2) Cave-ins and collapses. (3) High speed, high risk. (4) Xi is missing. (5) China and Japan have some disputes. (6) China’s trade data confirm global slump. (7) Are there any limits to unlimited QE? (8) Capital markets are the Fed’s casino. (9) Will Spain and Italy say thanks, but no thanks to ECB? (10) Latest US and European indicators: Not so bad. (More for subscibers.)