China's data raises recovery questions

<p>Kia ora,</p><p>Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news China has released a large set of economic data and not all of it is as positive as it first seems, or their officials claim.</p><p>But first, the New York Fed's <a href="https://www.newyorkfed.org/medialibrary/media/survey/empire/empire2021/esms_2021_03.pdf?la=en" target="_blank"><strong>survey of factories</strong></a> in its region in February was increasingly positive with and increase in new orders. But costs and prices rose at their fastest in ten years.</p><p>In Canada, <a href="https://assets.cmhc-schl.gc.ca/sites/cmhc/data-research/publications-reports/preliminary-housing-starts-data/2021/monthly-housing-starts-construction-data-64695-2021-m03.pdf?rev=09a64573-fbd8-48c3-a5f1-7cc23e88df8a" target="_blank"><strong>housing starts</strong></a> stayed high in February even it they just slightly undershot expectations.</p><p>In China, data for <a href="http://www.stats.gov.cn/tjsj/zxfb/202103/t20210315_1814755.html" target="_blank"><strong>industrial production</strong></a>, and for <a href="http://www.stats.gov.cn/tjsj/zxfb/202103/t20210315_1814754.html" target="_blank"><strong>retail sales</strong></a> both came in better than expected for the January-February period, and recorded gains far above the December month as well. Year-on-year data isn't so relevant however as the 2020 bases were hugely affected by the onset of the pandemic there (and even if they do look spectacular in a chart).</p><p>But the retail sales gain actually wasn't that impressive even if it was better than expected. It indicates their 'recovery' seems to be weakening.</p><p>Worse, there was a rise in their <a href="http://www.stats.gov.cn/tjsj/sjjd/202103/t20210315_1814794.html" target="_blank"><strong>surveyed unemployment rate to 5.5%</strong></a>, from 5.4% last month and 5.2% in December. In Chines