China’s economy just quietly cleared a low bar, and markets noticed. The country’s official non-manufacturing Purchasing Managers’ Index came in at 50.2 in June, up from 50.1 in May, according to data released by the National Bureau of Statistics on June 30. Analysts had penciled in a drop to 49.9, so this was a beat, not a blowout, but a beat nonetheless.
In PMI terms, anything above 50 signals expansion. Anything below signals contraction. China staying above that line for a second consecutive month is the economic equivalent of keeping a streak alive, modest, but meaningful.
What the numbers actually say
The services sub-index climbed to 50.4 in June. Telecommunications, internet software, IT services, and financial services and insurance were the standout performers driving that reading higher.
Not everything is moving in the right direction, though. Real estate and air transport both remained in contraction territory.
