China's manufacturing is pushing higher while the U.S.'s is sinking
Manufacturing industries in the U.S. and China seem to be moving in opposite directions. In October, a private company survey of China's factory activity shows it expanded for a third consecutive month, while U.S. manufacturing contracted for the third month in a row.
Why it matters: October was the largest deficit the U.S. manufacturing industry has had with China in the nearly eight-year history of the Caixin survey.
What happened: The Caixin China manufacturing index posted its highest reading since February 2017, beating economists' expectations, while the U.S. ISM manufacturing index barely edged up from its September level, which was the weakest in 10 years.
- Caixin's survey found that the total amount of new work received by Chinese producers rose by the highest rate in about six years, prompting manufacturers to expand production. Export orders also rose by the most in five months.
- That was likely due to the U.S. exempting hundreds of Chinese products from tariffs during the month, Caixin said in the survey.
Yes, but: Caixin's survey is mainly based on responses from 500 smaller private factories, while China's official index, which focuses on 3,000 larger manufacturers, contracted during the month.
Of note: A separate index that tracks U.S. manufacturers largely located in the American Midwest had its weakest reading in four years last month and the second lowest in a decade.