May 17, 2022 - Economy

China's latest economic data shows lockdown's toll

Data: FactSet; Chart: Thomas Oide/Axios

China's lockdowns continue to punish the world's second-largest economy, with a fresh round of data suggesting a worsening outlook for growth.

Why it matters: China is the single largest contributor to world growth, so its slowdown will ripple out in the form of lower economic activity and corporate profits worldwide.

Driving the news: New data out Monday showed retail sales activity collapsed in April, with unemployment rising and exports and industrial production slowing sharply.

  • Retail sales fell 11.1% in April, compared to the prior year, with considerable declines in major categories like restaurant spending and auto sales (a total of zero vehicles were sold in Shanghai).
  • China's surveyed unemployment rate rose to 6.1%, just shy of the high of 6.2% reported during the early days of the COVID outbreak in 2020.
  • Industrial and export activity decelerated to 4% and 3.9%, as lockdowns in key industrial hubs such as the Yangtze River delta — home to Shanghai — took their toll.

The bottom line: "The April activity data shows that the temporary disruption from the zero-COVID policy is more severe than expected, raising significant downside risk," JPMorgan analysts wrote in a research note.

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