According to the latest China Beige Book, an independent survey of 1,321 businesses conducted between June 1 and June 22, manufacturing activity strengthened markedly during the month while consumer spending also recovered. The survey found luxury goods sales rose sharply, although tourism-related spending remained weak, highlighting uneven confidence among Chinese consumers.

“The second quarter is ending on a more positive note than it began, but this performance will need to repeat itself in July and August for there to be legitimate cause for celebration,” the report said.

The findings indicate that the world’s second-largest economy has regained some traction after losing momentum in April and May of 2026. Earlier official data showed retail sales weakening while manufacturing investment slowed, particularly in the metals, chemicals, and automotive sectors.

The recovery was driven largely by the export sector. Factory activity accelerated during June, with the survey reporting a strong increase in orders from the United States as exporters rushed shipments ahead of the possibility of higher American tariffs later this year.

China’s exports to the United States have rebounded in recent months after a prolonged downturn in 2025, while freight rates on Asia-US shipping routes have climbed to their highest levels in nearly two years as importers bring forward orders before potential tariff increases.

The ratio reached nearly 90% of levels seen in 2024, according to official data. In contrast, May 2025 figures showed China’s exports to the world’s largest economy had dropped to 70% of their 2024 levels.

Republican Donald Trump’s recent meeting with his Chinese counterpart Xi Jinping, as per analysts, signaled possibilities of lower tariffs as of now, while Washington has yet to impose additional duties that could emerge from its Section 301 probes targeting countries identified for overcapacity and forced labor practices. The 10% duty on goods from most major trading partners that the Trump administration imposed under Section 122 is set to expire on July 24.

However, the China Beige Book found that export growth to other Asian economies slowed during June, while demand from Europe remained broadly unchanged, suggesting the recent improvement is concentrated in the US market.

Tianchen Xu, senior economist at the Economist Intelligence Unit, said June’s recovery was “first and foremost led by the external sector,” reflecting businesses’ efforts to front-load exports before trade policy becomes more restrictive.

China is scheduled to release retail sales and industrial data for June, as well as Q2 GDP, on July 15. It is expected to report June 2026 trade data on July 14.

Investors will now focus on a series of key economic indicators due in mid-July, including trade figures, industrial production, retail sales, and second-quarter GDP data. Economists also expect China’s official manufacturing purchasing managers’ index to return to expansion territory, signaling that factory activity may be stabilizing.

Goldman Sachs has raised its Q3 growth forecast for the world’s second-largest economy to 5% from 4.5%, citing lower oil prices and faster government spending, after a tepid Q2 for which it predicted a growth ratio of 3.5%. Nevertheless, analysts warn that China will need a sustained revival in domestic consumption, rather than relying primarily on exports, if the economic recovery is to prove durable.

The post China’s economic momentum picks up in June, finds Beige Book appeared first on International Finance.

The article pointed out that “after months of gloom, Americans are finally starting to feel better about the economy and more resigned to inflation. Americans are making small changes — buying meat in bulk, for example, or shifting more of their shopping to discount chains — suggesting that many families are learning to deal with higher prices.”

The report emphasised gas prices dropping from a record high of USD 5 and used similar talking points as the White House, stating that the “25 percent cut in expenses has been meaningful for many Americans.”

“Overall inflation, meanwhile, has eased slightly — prices remained flat in July, though they’re still up 8.5 percent from a year ago — as a result of aggressive interest rate hikes by the Federal Reserve,” the Washington Post piece stated.

Omaha native Nils Haaland said, “Soaring prices for fuel and food this summer forced him and his wife to stop dining out, postpone summer travel and buy less meat. Although prices are still relatively high, he says he feels less worried that inflation will continue to spiral out of control.”

It was reported that although Americans still rank inflation as their top issue in the run-up to the midterm elections, this percentage has decreased.

The Fed’s latest “beige book” report revealed that many households have switched to less expensive goods and are allocating more of their spending toward necessities like food. That has undoubtedly been the case at Walmart, where management claim to have noticed an increase in the number of middle- and high-income customers.

The post Americans finally learn to deal with Inflation appeared first on International Finance.