PMI shows China factory growth up, employment down

The HSBC/Markit Flash China Purchasing Managers’ Index rose unexpectedly to 50.5 in September from August’s 50.2, though the Tuesday PMI also showed one measure of employment dropping more than a point to 46.9, its lowest level since February 2009 during the global financial crisis, Reuters reported. That 5-1/2-year low in factory employment reinforced expectations that China would further relax financing conditions in the coming weeks, but stop short of cutting interest rates or loosening the reserve requirement for all banks to support the economy. Economists’ bets that there would be no overt policy easing are in line with recent remarks by senior leaders, though that resolve is likely being tested by a string of economic indicators suggesting a deepening slowdown.