- China's economy took a downturn in July due to Covid and a slowdown in its real estate sector, according to recent economic data from The National Bureau of Statistics (NBS).
- The results indicate that while industrial profits and retail sales rose in July, the growth pace decreased from June. Retail sales were up 2.7% to $530b and industrial earnings increased by 3.8% from a year earlier. The increase in industrial earnings fell short of market expectations of 4.6% growth and was less than the 3.9% gain in June.
- In addition to doing worse than the analysts' predicted 6.2% fixed-asset investment increased by 5.7% in the first seven months of the year. Meanwhile, the job market appears to be improving as the unemployment rate dropped 0.1 percentage points from June to 5.4% in July.
Why it matters
The housing market declined in July after being further shaken by a boycott of mortgages that hurt buyer confidence. The rate of decline in real estate investment was 12.3% in July, the highest rate this year, while the decline in new sales increased to 28.9%. Meanwhile, the central bank of China unpredictably reduced its benchmark interest rates as it increased support for a struggling economy burdened by Covid lockdowns and a worsening real estate slump.
