(Bloomberg) -- Chinese industrial production and retail sales growth slowed last month, though a pickup in investment may indicate that stimulus is beginning to reach the real economy.

  • Industrial production growth decelerated to 5.4 percent, below all estimates. Retail sales growth slowed to 8.1 percent. Fixed-asset investment growth sped up, expanding 5.9 percent in the first eleven months of 2018.

Key Insights

  • Industrial production growth has slowed in 2018 along with a weakening of manufacturing. That’s despite the growth in exports which were boosted by front-loading of shipments to the U.S. ahead of a possible increase in tariffs. November trade data showed that effect is starting to taper off, which may put even more downward pressure on manufacturing further ahead.
  • Growth of business investment has decelerated this year thanks to a government deleveraging campaign that led to a much slower increase in infrastructure spending. There are signs that investment is beginning to turn around.
  • Retail sales growth has been weak all year, with auto sales particularly bad. The government announced policy tweaks aimed at easing the tax burden on households, and is expected to continue leaning on fiscal stimulus to support the economy in the coming quarters.

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  • The unemployment rate fell to 4.8 percent.
  • Credit growth exceeded forecasters’ estimates in November, according to data from earlier this week, signaling that recent government measures to increase lending may be starting to take effect.

To contact Bloomberg News staff for this story: Matthew Boesler in Beijing at mboesler1@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, James Mayger, Jeffrey Black

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