US Retail Sales / UK Jobs / China GDP
US retail sales data followed last week’s CPI numbers by surprising to the upside. Total sales were up 0.7% versus a forecast of 0.4%, with sales excluding autos and gas up a massive 1.0 % versus the consensus of 0.3%. The previous readings were also revised higher, from 0.6% to 0.9% and 0.3% to 0.5%, respectively.
The control group, which exclude sales of building materials, food services, gasoline and autos also blew the doors off, coming in at 1.1% versus just 0.4% estimates, the most since the turn of the year. Again, last month’s reading was revised higher, from 0% to 0.3%. The control group sales are used in helping calculate GDP.
On this side of the pond, we had UK unemployment numbers out this morning. The jobless rate increased to 4.2% versus the census of 4%, the highest since mid-2023. Following the release, Liz McKeown, the Office for National Statistics (ONS) said: “Recent trends of falling vacancy numbers and slowing earnings growth have continued this month albeit at a reduced pace.” Adding: “At the same time, we are now seeing tentative signs that the jobs market is beginning to cool, with both a fall in the headline employment rate from our survey and a drop in the total number of people on payrolls from HMRC data.”
However, collecting data on the job market has been problematic in recent months. The ONS has repeatedly advised caution when analysing its employment, unemployment, and inactivity figures, attributing the complications to a significant drop in survey responses over recent months.
Finally, China's economy grew faster than had been anticipated in the first quarter. GDP in Q1 rose by 5.3%, compared to the 5.2% seen previously, and well above market calls for a 4.8% expansion.
China's GDP expanded by 1.6%qoq in the first quarter, which also exceeded expectations of 1.5%qoq following a revised expansion of 1.2%qoq in the previous quarter.
Nevertheless, other numbers out this morning from the world’s second-largest economy were not so upbeat. Both industrial production and retail sales missed by a wide margin. Industrial production came in at 4.5%yoy, versus the consensus of 6%, while retail sales witnessed an even bigger miss at just 3.1%yoy against expectations for 4.8%.
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