Economic data from last week regarding the U.S. economy reveals a relatively sharp rise in the U.S. trade deficit in November, a fact that will detract from the U.S. GDP in the fourth quarter.
There was a sharp decline in exports in October, that increased in November by 1.0%, to a level indicating an annual increase of 3.3% (vs. an annual pace of +1.2% in October).
Imports rose sharply in November by 3.8%, and increased annually by 2.5% (vs. an annual pace of -0.7% in October).
The CPI (Consumer Price Index) rose by 2.5% in the past year, compared to an annual pace of 2.0% in November and slightly above expectations.
On the other hand, the PPI (Producer Price Index) fell by 1.9% in the past year.
In the Bottom line, it seems that inflation in China is stable and relatively low.
In addition, we note positively that the higher than expected increase in the Chinese exports and imports gave financial markets hope that the trend of moderation in the rate of Chinese economy’s growth has stalled, and that in the near future the growth rate will reaccelerate.
Chinese exports rose over the past year by 14.1%, compared to annual increase of 2.9% in November, and Chinese imports rose by 6.0% compared with annual stability recorded in November.