CHINA'S MANUFACTURING SECTOR IS CONTRACTING

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China’s unofficial HSBC manufacturing PMI report is out and its disappointing.

The headline number fell to 49.2 from 50.4 a month ago.  This was worse than economists’ expectation fo 49.6.

A reading below 50 signals contraction.

On Friday, we learned that China’s official PMI report unexpectedly climbed to 50.8 from 50.6 in April.  Economists were looking for a decline to 50.0.

All of this comes on renewed fears that China is slowing down again.

China’s HSBC PMI report has a greater weight toward small and medium sized enterprises, which tend to be more sensitive to economic swings.

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