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Retail sales in China missed expectations in November, adding to pressure on policymakers after President Xi Jinping signalled last week that he wants to spur household consumption to boost the world’s second-largest economy.

The consumption measure added 3 per cent year-on-year, below a forecast of 4.6 per cent in a Reuters poll, and last month’s rise of 4.8 per cent. Industrial production added 5.4 per cent, slightly above predictions.

The unexpectedly weaker growth comes days after the Communist party leadership called for “vigorous” efforts to boost consumption and domestic demand at the annual Central Economic Work Conference last week.

The November retail number “was the big disappointment of the month, as retail sales . . . came in well softer than both consensus and our forecasts”, said Lynn Song, chief economist for greater China at ING in a research note.

Beijing has struggled to boost confidence against the backdrop of a property slowdown, now entering its fourth year, and bouts of deflation. The government unveiled a series of measures to boost stock markets in late September and to refinance local government debt last month.

Chinese equities fell on Monday. The CSI 300 index of blue-chip mainland-listed companies was down 0.6 per cent by mid-morning, while Hong Kong’s Hang Seng index fell 0.4 per cent.

China’s 10-year sovereign bond yield fell 0.05 percentage points to 1.73 per cent and its 30-year yield fell below 2 per cent for the first time.

The conference’s work report last week listed consumption as the first of nine economic priorities for 2025, ahead of the “new productive forces” that have emerged as a core pillar of Xi’s approach.

The emphasis is one of several signs of growing urgency from the government, including a shift in its monetary policy stance to “moderately loose” from “prudent” for the first time in over a decade last week.

Consumer prices in November rose just 0.2 per cent, a five-month low. Prices have increased every month since January, but growth has remained close to deflationary territory, adding to concerns over the strength of domestic demand.

Consumer spending was an economic concern in China during the Covid-19 pandemic, when the government imposed strict lockdowns to prevent the spread of the virus, and has failed to bounce back fully since a reopening almost two years ago.

ING’s Song said that aside from the National Bureau of Statistics’ property price index for 70 cities, which showed marginal falls during the month and indicated a stabilisation, the overall data was softer than expected in November.

Property investment was still declining, falling 10.4 per cent in the 11 months to the end of November, the NBS said, compared with a fall of 10.3 per cent in the first 10 months.

Goldman Sachs economists attributed the soft retail sales to an earlier than usual start to the annual November “Singles Day” online shopping festival, which pulled forward some sales to October.

But Goldman and other economists said that overall, indicators suggested that annual growth this year would end close to the government’s official target of 5 per cent.

Xi last week pledged to meet the target, saying that China would continue “to play its role as the world’s largest economic growth engine”.

Citi analysts said the government would probably release few details of any proposed fiscal stimulus measures until early next year during the annual meeting of China’s rubber stamp parliament, the National People’s Congress. This normally sets out the economic agenda for the following 12 months.

“The politburo and CEWC concluded with a supportive tone but no major breakthroughs or concrete measures,” Citi said. “The next two months could be a policy vacuum until the NPC.”

From: Revere High School
Sent: Friday, June 2, 2023
Good Afternoon.
We are writing to update the Revere High School community about a
physical altercation that occurred at the end of first lunch today (Friday
6/2/23).
Before the end of the first lunch, a verbal argument between students
became physical. Then friends of students in the argument joined
in. Many students gathered around and joined in the physical
conflict. Many others gathered around to record.
Administrators and multiple other adults got involved and were able to
separate the groups of students from one another, isolated to different
parts of the building. At the same time, the administration collaborated
with the Revere Police Department to ensure additional support and
presence, both in the building and at dismissal.
This situation is currently under investigation as there are many details
and facts to sort out. Appropriate disciplinary processes have already
been initiated for students identified to be involved. The investigation
(including a review of both RHS cameras, review of student-produced
videos and statements) will result in additional students facing school
discipline for their involvement.
There is a lot of misinformation currently on social media about this
incident. At the same time as this was unfolding, the RHS Main Office
began receiving multiple calls from concerned parents in response to a
social media post. This post alleged that a stabbing occurred at Revere
High School. There was no stabbing. No person in Revere High School
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weapon on any student involved in the cafeteria fight. I can promise you

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The Federal Reserve is set to take a more cautious approach to interest rate cuts on fears that the Trump administration’s policies will stoke higher inflation, according to academic economists polled by the Financial Times. 

The economists, who were surveyed between December 11 and 13, moved up their forecasts for the federal funds rate next year compared to the previous FT-Chicago Booth poll in September. The vast majority thought it would hover at 3.5 per cent or higher by the end of 2025, whereas most respondents in September said it would probably fall below 3.5 per cent by that point.

If the Fed follows through with a quarter-point cut at its meeting next week as expected the policy rate will stand at 4.25-4.5 per cent.

“Over the last few months, the downside risks to the labour market have become a little less bad and progress on inflation seems to have stalled a bit,” said Jonathan Wright, a former Fed economist now at Johns Hopkins University, who helped to design the survey.

“Inflation has come down more painlessly than I and most people had expected, but I think we may still be seeing that the last bit [getting to target] will be a little harder, and so that certainly is an unlikely environment for the Fed to be in a hurry to reduce rates,” said Wright.

Tara Sinclair, who previously worked at the Treasury department and is now a professor at George Washington University, said that could even translate to the Fed going on an extended pause after a December cut and holding interest rates steady for the remainder of next year.

“In my mind, they need to stay in restrictive territory all the way until it’s clear that inflation is back at their target,” she added.

Officials are plotting how quickly to get to a “neutral” policy rate that neither stimulates nor suppresses growth. They have openly discussed slowing the pace of cuts once they get closer to that level, although chair Jay Powell has conceded that policymakers lack clarity as to where that is.

“We’re pretty sure it’s below where we are now,” he told reporters in November.

Looming large over the policy outlook is the return of Donald Trump to the White House next month. Trump has vowed to enact sweeping tariffs and deport millions of Americans while also slashing taxes and regulations.

Just over 60 per cent of the economists polled in the survey, which was conducted in partnership with the University of Chicago Booth School of Business, thought Trump’s plans would have a negative impact on US growth. Most are also bracing for higher inflation if his plans to enact universal tariffs and steep levies on China materialise.

These concerns are percolating at a time when worries about price pressures still linger.

Just over 80 per cent of the 47 economists polled said that inflation over the next year, as measured by the personal expenditures price index once food and energy prices are stripped out, would not dip below 2 per cent until January 2026 or later. In September, only about 35 per cent of polled respondents made the same estimate.

The median estimate of core PCE inflation over the next 12 months also rose to 2.5 per cent from 2.2 per cent compared to September’s survey.

Economists remained sanguine about the outlook for the economy, with the median estimate of real GDP growth rising to 2.3 per cent from 2 per cent in September. Concerns about a recession were also distant, with over half of respondents estimating that the next recession would start no earlier than the third quarter of 2026.

Yet over a longer horizon, Sinclair warned that Trump’s policies would start to bite.

“I think very clearly in the long run this combination of policies is not good,” she said.

The Fed may also struggle with how to navigate this period, the economists warned, with one bracing for a “confrontation” between the president-elect and Powell if the central bank is forced to keep rates elevated to counteract the impact of Trump’s policies.

Wright said the Fed would be “more twitchy” on inflation than in the past, given the post-pandemic surge in price pressures.

“Back in 2019, the Fed could afford to take a view of ‘we’re going to wait until we see the white of inflation’s eyes’”, he said. “I don’t think that’s the attitude that the Fed is going to have today.”