China economy keeps recovering but in a speed slower than expected

Despite recently the US market was still filled with negative factors and uncertainty, the US property market remains hot. In September, existing-home sales continued the fourth consecutive month surge to a seasonally-adjusted annual rate of 6.54 million, soared 9.4% from the last month and around 21% from last year. The year-over-year change of median existing-home price was around 15%, increased to $311,800, implying both the quantity and price of the housing market surged. The drop of 30-year fixed-rate mortgage to record low 2.89% is definitely one factor supporting the property market, and also the abundance of buyers in market as the work from home demand may induce more buyers. Since the total housing inventory declined to 1.47 million, which is only capable to last 2.7 months at current pace – a record low number, in short term the US property market may remain hot.

China’s third quarter’s GDP has recorded a 4.9% growth, higher than first two quarter, but lower than expected 5.2% growth rate. This makes the growth for the first three quarters of the year to 0.7%, achieved positive growth rate from last year. Industrial production had continued strong and steady recovery with 6.9% rise in September, outperformed the 5.6% growth in August. The IMF raised their forecast on China this year’s GDP growth from 0.9% to 1.9%, while they predict the global economy will be contracted by 4.4% this year. Even though with all the good news, still need to aware for potential negative factors towards China. Retail sales still down 7.2% for the first nine months of the year even with 3.3% rose in September. The announced September urban unemployment rate 5.4% may not be able to reflect the labor market accurately, as migrant workers are not included in the numbers. Number of rural migrant workers get employed back into cities in September is decreased by 2.1% compare with the same period in the last year. China economy is indeed recovering, but may not be completely and evenly in all sectors.