China’s economy surprised with signs of improvement

China’s economy surprised with signs of improvement even as deflationary pressures persisted and employment weakened, throwing fresh doubt over the likelihood of further monetary stimulus by Beijing in the face of higher US tariffs, informed Bloomberg.

Factory activity and construction had their strongest month of the second quarter in June, according to China’s official purchasing managers’ indexes released on Monday. The official manufacturing PMI remained in contraction but reached 49.7 from 49.5 in May — exceeding forecasts along with a measure of construction and services.

A tariff truce with the US has led to a rebound in trade, contributing to a broad improvement in new orders for factories, builders and service providers. The latest PMI reading captured the first full month after Beijing and Washington agreed to a 90-day pause in their trade war.