In August the world’s second largest economy, China’s, showed 13.9% growth in industrial production. Because so much of China’s economy is manufacturing driven this figure is a good approximation of economic health. The result was the first time in several months that the month over month figure was up, rather than down. Lastly, the figure also beat economists’ expectations and by a considerable amount.
Analysis: China is not just the manufacturing locale for U.S. consumer goods, it also is for the entire world. So for the Chinese economy to return to an acceleration of growth is a strong sign that worldwide consumer consumption and growth is getting more robust. Clearly this is a positive thing and doesn’t require too much analysis.
Importance grade: 7; while important, the Chinese are also notorious liars when it comes to their economic data. I will look for other data that supports the world’s economy getting healthier. Yes, the European economy revises its growth estimates upward, but by a measly 0.6%. We need more data to ensure a confident return to economic health.
Jason
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