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US Economy Up 4% Y/Y in November, China Exports Slow
December 24, 2018

US Data released last Friday showed America’s economy punched ahead in November, while China’s was comparatively hobbled. US retail sales in November grew, by 4% Y/Y above expectations, helped by a Black Friday and Cyber Monday. And the amount made by US goods-producing facilities in November (its “industrial output”) also increased more than anticipated: it was also ~4% higher Y/Y, partly stoked by cold weather boosting activity at utility companies as frosty Americans turned up the heat. China, by way of contrast, had higher November retail sales growth than America, at over 8% – but it was lower than economists predicted. Ditto for the country’s industrial output: it was 5% higher than last November’s but below expectations. But rather than settle in for a cold winter, Chinese officials are already planning to reinvigorate the country’s economy. China’s economy is important to the US and vice versa. Last year, more a fifth of the US imports came from China, which may turn out to have fallen in 2018: China’s exports grew at a slower-than-expected rate in November. And the country’s domestic consumer spending is slowing too, which could result in less demand for US products and weigh on American economic growth (last year 8% of US’s exports were China-bound). The merry-go-round of potentially slowing growth in both countries could’ve been what is causing a downward trend in the markets. Since the US and China managed to put a temporary stop in tariff increases earlier this month, China’s is buying more of America’s soybeans – which should help balance the amount the countries spend on goods from each other. On Friday, China confirmed it’d (at least temporarily) lower import duties on US-made cars from 40% to a more standard 15% – good news for German automakers BMW, Daimler, and Volkswagen, which manufacture Stateside and contribute over 60% of car exports from the US to China.