China Factory Activity Falls Amid Tariff Fight, Economic Downturn
BEIJING (AP) – A survey Monday shows that China’s factory activity shrank in December for the first time in more than two years, intensifying pressure on Beijing to reverse an economic slowdown as it enters trade talks with the Trump administration.
The purchasing managers’ index of the National Bureau of Statistics and an industry group, the China Federation of Logistics & Purchasing, fell to 49.4 from November’s 50.0 on a 100-point scale. Any reading below 50 shows that activity is contracting. The December figure was the lowest since February 2016 and the first drop since July 2016.
In the quarter that ended in September, China’s economic growth sank to a post-global crisis low of 6.5 percent compared with a year earlier.
Humming U.S. Factories End 2018 on a Sour Note
(Bloomberg) – Five Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016, and the latest evidence that a pillar of the U.S. economy has started to wobble heading into next year.
The Dallas Fed’s factory index unexpectedly contracted this month, falling to a two-year low of minus 5.1 from 17.6 in November, and the steepest decline since 2013. The district bank covers the oil-producing region of Texas, northern Louisiana and southern New Mexico. Oil prices are down about 40 percent from a nearly four-year high in October.
More than 20 percent of manufacturers said that their outlook worsened this month, according to the regional Fed report released Monday. “Expectations regarding future business conditions remained positive but retreated notably in December,” it said.
The report follows other weakening Fed factory gauges in the New York, Philadelphia, Richmond and Kansas City districts, just the sixth time that’s happened during the economic expansion now in its 10th year, a Bloomberg analysis of Fed data shows.