Industrial output, manufacturing declined. Retail sales fell.
IP growth was -2.9% YoY, compared to the Bloomberg consensus of 0.4%.
Retail sales fell 11.1% year over year, while the consensus was down 6.1%.
From Bloomberg today:
Gross domestic product (GDP) contracted 0.68% in April from a year earlier, the first contraction since February 2020, according to Bloomberg Economics estimates, data on Monday showed. Growth could weaken to below 2% in the second quarter, while S&P Global Ratings forecasts could be as low as 0.5%, according to UBS. Citigroup economists cut their full-year 2022 growth forecast to 4.2% from 5.1%.
The wisdom of the zero coronavirus strategy is rightfully questioned, considering the transmissibility of omicron variants. What worked before may not work now.I’m not sure this is the dominance of ideology (after Mao’s anti-swallow movement) over science and pragmatism [1]although I (definitely) don’t understand internal deliberations Zhongnanhai. The rational approach is to rely on mass vaccination, wearing masks, using antivirals and maintaining social distancing – but this approach relies on an effective vaccine. There is some evidence that Chinese (non-mRNA) vaccines are less effective than mRNA vaccines, although they are still better than no vaccination (or hydroxychloroquine or ivermectin, which the Chinese leadership believes they do not recommend).
In any case, this misguided approach has huge implications for the United States, as it has the potential to amplify a series of cost-push shocks that hit the U.S. economy.
