CHINESE MANUFACTURING SLOWS, HSBC PMI SLIPS TO 50.4

The HSBC China manufacturing PMI report is out, and the numbers were worse than expected.

The headline number fell to 50.4 in April from 51.6 a month ago.

Economists surveyed by Bloomberg were looking for a reading of 50.5.

This reading is also a tad below the preliminary (HSBC Flash) 50.5 number we got last week.

Any reading above 50 signals growth.

Here are the key points from Markit:

• Total new orders increase, but new export orders decline modestly
• Both input prices and output charges fall sharply
• Employment levels cut for the first time since last November

From HSBC's Hongbin Qu:

The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up. The looming deflationary pressures also suggest softer overall demand conditions. All this is likely to weigh on the labour market, which is likely to invite more policy responses in the coming months.”

This report follows yesterday's official PMI report published by China's National Bureau of Statistics. Their index fell to 50.6 from 50.9 a month ago.