China Composite PMI Employment Drops At Fastest Pace Since Feb 2009

Tyler Durden's picture


After last weekend's schizophrenic expanding (official) / contracting (HSBC) Manufacturing PMI, China's Services PMI printed at 50.7 - its lowest since August 2011, as the business expectations index dropped to an 11-month low. The Composite PMI improved (after 3 months of contraction) but most notably, the composite employment declines at the fastest pace since Feb 2009. What is perhaps most worrisome is, as Markit notes, "The latest survey signalled the second-weakest degree of optimism since the series began in November 2005."



As HSBC/Markit notes,

Subdued client demand and an uncertain economic outlook weighed on service sector confidence towards the 12-month business outlook in May.


The latest survey signalled the second-weakest degree of optimism since the series began in November 2005.




“The headline HSBC China Services PMI moderated to 50.7 in May, down from 51.4 in April. Latest data signalled a relatively big drop in the business expectations index, which fell to an 11-month low of 58.1, down from 60.7 in April. Both the new business and outstanding business indices were slightly weaker than April. The employment index, unchanged over the month, remained at a relatively low level. Coming after the stronger Manufacturing PMI reading for May, the slight disappointment in the headline Services PMI suggests that growth momentum remains slow and private sector sentiment is weak.


We think policy makers should continue to ease monetary and fiscal policies in the coming months to help support growth.”

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Wed, 06/04/2014 - 21:59 | 4825446 max2205
max2205's picture

Why isn't China lying on their reporting

Wed, 06/04/2014 - 22:02 | 4825456 disabledvet
disabledvet's picture

How much more easing...err, even possible here?

Wed, 06/04/2014 - 22:51 | 4825588 Oldwood
Oldwood's picture

Who says they aren't? Its possible its a lot worse than they are letting on. They have some pretty big bets on the table that  they can't afford to see go bad right now.

Thu, 06/05/2014 - 00:21 | 4825755 Catflappo
Catflappo's picture

Ah yes, the universal panacea, with no unintended and/or negative consequences:  "easing".  


Wed, 06/04/2014 - 22:00 | 4825452 Yen Cross
Yen Cross's picture

 Winning! Boo Yaa HSBC!

Wed, 06/04/2014 - 22:03 | 4825467 youngman
youngman's picture

They are to busy looking for their copper

Thu, 06/05/2014 - 01:25 | 4825825 BrosephStiglitz
BrosephStiglitz's picture

On the phone to Qingdao now.  My warehouse manager assures me there is a "veritable bounty" of commodities there.  He's willing to ship tomorrow for a nailgun today.

Wed, 06/04/2014 - 22:07 | 4825478 orangegeek
orangegeek's picture

Everything is magically above 50.  Fancy that.

Wed, 06/04/2014 - 22:09 | 4825486 NoDebt
NoDebt's picture

And GDP growth shall not be reported at less than +7.0%.


Wed, 06/04/2014 - 22:18 | 4825519 TheRideNeverEnds
TheRideNeverEnds's picture

Explains why the S&P is a full two points off of all time highs.  I am not worried though, if we are up less than 25 points tomorrow on the news it will be a let down.  Whatever the news is it wont matter one way or another we are going higher.  

Wed, 06/04/2014 - 22:51 | 4825574 Yen Cross
Yen Cross's picture

   Might have to buy some GBP and AUD puts.  " Can't own the stock in curencies?"   I hear the glass breaking.

  Dim Sum Yen just shorted usd/jpy. Target 1/2 rice cakes  (200-h4) 

Thu, 06/05/2014 - 00:23 | 4825760 ebworthen
ebworthen's picture

Best of luck Yen ;-)

Thu, 06/05/2014 - 00:50 | 4825798 Yen Cross
Yen Cross's picture

Ebbie I've been out of the loop.  ( I think the world of you Ebbie)

  It's amazing how 1 or 2 fortnights from Z/H changes things. The kids learn so fast, but are so niave.

Wed, 06/04/2014 - 23:33 | 4825674 Seek_Truth
Seek_Truth's picture

There is a very good reason for the "old" meaning of "Mongoloid".

Wed, 06/04/2014 - 23:40 | 4825683 Yen Cross
Yen Cross's picture

 Good Lord!  Don't be dissing Timmah



Wed, 06/04/2014 - 23:50 | 4825700 Seek_Truth
Seek_Truth's picture

Lol! Truly lol worthy!!!

So glad I wasn't taking a drink when I read that!


Wed, 06/04/2014 - 23:58 | 4825718 Yen Cross
Yen Cross's picture

  Anything to deflect the question. Spoken like a true wanabe poet.

Thu, 06/05/2014 - 01:03 | 4825809 Spungo
Spungo's picture

They probably are lying. The bubble that popped in China was 10x worse than the housing bubble we just had.

Thu, 06/05/2014 - 01:27 | 4825840 Seek_Truth
Seek_Truth's picture

"'They will throw their silver into the streets, and their gold will be treated as a thing unclean. Their silver and gold will not be able to deliver them in the day of the LORD's wrath. It will not satisfy their hunger or fill their stomachs, for it has caused them to stumble into sin. - Ezekiel 7:19

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