China Industrial Production, Retail Sales Growth Slows

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China's industrial production and retail sales growth slowed in July, suggesting a slowdown in the economic recovery amid new COVID-19 outbreaks and supply chain disruption.

Industrial production growth slowed to 6.4 percent in July from 8.3 percent a month ago, data from the National Bureau of Statistics revealed Monday. Output was expected to gain 7.8 percent.

Retail sales grew at a slower pace of 8.5 percent on a yearly basis, following a 12.1 percent rise in June. This was also weaker than the economists' forecast of 11.5 percent.

During January to July, fixed asset investment increased 10.3 percent from the same period last year. Economists had expected an annual growth of 11.3 percent after gaining 12.6 percent in January to June.

The unemployment rate climbed to 5.1 percent in July from 5 percent in June.

The slowdown partly reflects disruptions to consumer activity due to the recent virus flare-up and flooding in central China, Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said.

But investment spending and industrial activity, which are less sensitive to virus restrictions, also weakened markedly, suggesting that tighter credit conditions are biting, they noted.

The drop back in consumption should reverse once the virus situation is brought under control and restrictions are lifted, the economist added. But the slowdown elsewhere will deepen over the rest of the year.

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