Investing

Second Take: China's Economic Data So Bad That Stimulus on the Way

If the United States had China’s growth numbers, the world would be in the biggest boom that it has seen in a lifetime. The problem is that China is not anywhere close to the United States, and it just takes a whole lot more growth from China to equate to much global growth. Today’s economic data from China was bad enough that it almost signals no other option than economic stimulus in the form of easing and other measures.

Inflation, measured by the consumer price index, was only 1.8% and was lower for the fourth straight month.

China’s industrial output fell to growth of 9.2% in July, but that is south of 9.5% in June and it marks a low not seen since way back in the recession in May of 2009. Reuters was looking for a reading of 9.8%. Should we say that they were “hoping” for 9.8%?

China’s problem is not just an internal measure. It is still heavily dependent on global growth. With the rest of the BRIC nations and emerging markets showing lower growth, it seems odd that the expectation would have been for an improvement yet. Europe is in recession and U.S. growth is considered anemic by almost all market observers.

Maybe more rate cuts are coming down the pipe from China. Bad news has to be bad enough that it will drive stimulus. That is the prevailing mentality.

JON C. OGG

The #1 Thing to Do Before You Claim Social Security (Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.