The Caixin Services Purchasing Managers' Index (PMI) for May, released by Chinese financial information provider Caixin, made a surprise rebound thanks to the May holiday effect.
On June 5, Caixin announced that the services PMI for May was 51.1, up 0.4 points from April's 50.7. This slightly exceeded the market forecast of 51.0.
In April, the index had dropped by 1.2 points from March's 51.9, marking the lowest level since September of the previous year.
This index, which Caixin compiles based on surveys of purchasing managers at service companies, indicates economic expansion when above 50, and contraction when below 50.
Caixin analyzed that despite the U.S. tariff policy, the holiday effect at the beginning of May led to active travel and dining consumption, which in turn boosted the service sector's performance indicators.
Previously, the services PMI for May announced by China's National Bureau of Statistics was 50.2, up 0.1 points from the previous month.
Meanwhile, the manufacturing PMI for May, released by Caixin on June 3, fell by 2.1 points from the previous month to 48.3 due to the impact of the U.S.-China tariff war, returning to contraction territory for the first time in eight months. This is the lowest level in 32 months. Due to the decline in the manufacturing index, Caixin's composite PMI for May also fell by 1.5 points from the previous month to 49.6.
Bloomberg News explained that while the consumption-driven economy is showing stability, high U.S. tariffs are threatening export demand.
Wang Zhe, chief economist at Caixin, stated that there are currently many unfavorable factors for economic development, the uncertainty of the external trade environment is increasing, and various difficulties and challenges exist internally as well. He said that boosting domestic demand should help restore the income base, and that to achieve this, it is necessary to improve the employment environment, strengthen the stability of people's livelihoods, increase residents' disposable income, and enhance the expectations of market participants, thereby leading to the sustained recovery and improvement of the economy.
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