Tuesday, October 20, 2026
China's economy grew 4.5 per cent from a year earlier in the third quarter, up from 4.3 per cent in the second, the National Bureau of Statistics said on Monday. Growth over the first nine months was 4.6 per cent. Fixed-asset investment fell 7.2 per cent over the same period and retail sales of consumer goods rose 1.1 per cent.
China's retail sales fell 0.6 percent year-over-year in May, the first contraction since the pandemic era. Fixed asset investment declined 4.1 percent in the first five months of the year. Real estate development investment fell 16.2 percent. China Vanke, one of the few major developers to have avoided default, posted a combined $2.2 billion quarterly loss.
A 596,000 decline in foreign-born workers since January 2026, combined with a parallel drop in labor force participation among US-born workers, has left employers in construction, healthcare, agriculture, and manufacturing unable to fill open positions. The labor shortage the crackdown was supposed to solve has deepened.
The Nasdaq and S&P 500 hit record highs this week even as the 10-year Treasury yield touched its highest level since 2002. Underneath the records, fewer stocks are doing the work, and high-yield credit spreads have widened since late September.
The Institute for Supply Management's services survey slipped to 54.9 in September, still comfortably in growth. Its prices index rose to 74, the highest since July 2022. Half of the purchasing managers surveyed paid more for what they buy; 2.2 per cent paid less. All 17 industries that reported a change in prices reported an increase.
The hires rate has sat between 3.1 and 3.5 per cent every month since March 2024, a pace last seen outside the pandemic in 2013. Quits are at 1.9 per cent. Yet real consumer spending rose 0.6 per cent in August while real disposable income did not grow, and the saving rate fell to 4.1 per cent. This week's data describe a labour market that has stopped moving and households that have kept spending anyway.
Beneath the affordability complaints, savings behavior has shifted. Households are extinguishing revolving debt at rates not seen in a decade.