China has reported shocking drops in retail sales and factory production, widely missing market expectations.
According to China’s National Bureau of Statistics retail sales plunged 11.1% in April from a year ago. Results are below the 6.1% drop forecast in a Reuters survey and much lower than the 3.5% decrease seen in March.
Industrial production by the world’s second largest economy also fell 2.9% last month from a year earlier, reversing a 5% gain in March. This was the worst contraction since February 2020 when the first wave of lockdowns almost stopped China’s economy.
Unemployment also was a disappointment. Although the urban jobless rate had a mild increase from March numbers, this was already at a 21-month high. Young people are struggling even more to find jobs, raising more alarms in the ruling Communist Party.
Results reported by the National Bureau of Statistics hit top global markets in early Monday trading.
After recording 4.8% growth for the first quarter China’s economy was apparently moving into a steady recovery process. However, Beijing’s recent lockdowns to curb its worst covid outbreak in two years has become a growing threat. Economists now expect China’s GDP to shrink this quarter.
Shanghai, the country’s financial center and a manufacturing hub, is one of almost 30 cities that are reported under lockdown for more than six weeks.