Markets Unsteady as Fed Signals Urgency of Economic Threat: Live Updates

New data shows the costs of China’s stalled economy.

China posted record drops in retail sales, manufacturing activity and investment in the first two months of the year, official data released on Monday morning in Beijing confirmed, after coronavirus containment efforts brought the world’s No. 2 economy to a halt.

Economic statistics for January and February had been expected to show a decline. But the data released on Monday was even worse than many economists had anticipated.

The Chinese economy was running fairly strongly up until the lockdown of Wuhan on Jan. 23. Then activity nose-dived, more than offsetting that three-and-a-half weeks.

“The epidemic has had a relatively big impact on current economic operations,” said Mao Shengyong, director general of the department of comprehensive statistics at the National Bureau of Statistics.

Zhu Chaoping, a global markets strategist in the Shanghai office of J.P. Morgan, said that the willingness of China’s statisticians to acknowledge steep declines in January and February made it increasingly likely that China would report an actual shrinkage of its economy in the first quarter of 2 or 3 percent and possibly more. “They have let us know the real situation,” he said.

Mr. Mao said that whether the economy shrinks in the first quarter would depend on what happens in March.

Retail sales tumbled 20.5 percent in the first two months of the year compared with a year ago, after authorities kept stores closed beyond January’s Lunar New Year holiday. Even when shops reopened, often under pressure from their landlords, they had almost no customers until early March as many people continued to stay home to avoid infection.

Article source: https://www.nytimes.com/2020/03/15/business/stock-market-today-coronavirus.html