Showing just how pernicious the effect of Trump's tariff tango is, China's manufacturing is suffering at pretty much the same time as the US's is also sliding. A triumph.
The chart shows the average of S&P Global's and the official NBS manufacturing PMIs, extreme-adjusted, and smoothed using a 3-month centred moving average.
During and just after Covid, it became important to watch services. In a normal business cycle, it's manufacturing and construction which drive the cycle, because of the inventory (stock) problem. Services, on the other hand, tend to fluctuate much less over the cycle, so the aberration of big swings during and after Covid is probably over, and manufacturing is once again important. (Though, to be fair, in the US, confidence is so damaged that services may still be affected.)
It remains to be seen whether manufacturing drags down services and with it GDP, globally, but that has to be a big risk.
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