Reflecting the pick-up displayed by CLIC statistics a week prior, factory activity in China accelerated in June according to a private monthly survey revealed earlier on Monday by Markit Economics. New orders and output grew, giving further credence to the idea that the world’s second largest economy is skirting predictions of a downturn.
Manufacturing PMI for China Shows Healthier Economy
Caixin’s PMI for manufacturing momentum reached 50.4 last month, making its way back over the key threshold of 50.0 marking the division between growth and contraction. The reading easily bested economist estimates of 49.5, as well as the previous month’s 49.6 tally which amounted to the first pullback in almost one year. Aggregate new orders hit 51.0 for June – the best reading in 3-months – up from May’s 50.3 mark. Production also picked up, with the pace of firings slowing to a three-month low. Relative to the official readings, Caixin’s PMI figures are a better indicator of small private manufacturing activity in China. Nevertheless, concerns remain that the ongoing upswing in output is simply a temporary rally for the manufacturing sector. Meanwhile, the Yuan has weakened relative to the dollar after the report, trending slightly above 6.7860.Consumer Expenditures in US Multiply
With the pace of inflation slowing, consumer expenditures in the US picked up slightly in May, reflecting the potential for sustained growth that could yet influence the US Federal Reserve towards raising the benchmark interest rates once more before the end of 2017. Spending, which comprises approximately two-thirds of the country’s economic activity, crawled up by 0.10% in May, per data from the Department of Commerce. Post-tax income expanded by 0.60% for the month, pushing the pace of savings in the US up to 5.50% - the largest amount since September of 2016. Prices for consumers, with the exception of volatile energy and food sectors, increased by a 1.40% annualized rate against a gain of 1.50% in April. The rate marked the lowest year over year growth since November, pushing inflation under the Fed’s preferred rate of 2.00%. The S&P 500 index has climbed slightly higher since the weekly reopening, with futures currently sitting near 2430.