Uneven recovery in industrial production as trade wars loom

If the soft patch is over, the data from Asia yesterday were inconclusive.

In South Korea, industrial output fell a seasonally-adjusted 1.7 percent in April compared with a revised 3.9 percent rise in March. Domestic demand was also weak, with wholesale and retail sales and corporate investment all falling.

In contrast, Japan's industrial output rose 2.2 percent in April from March, reversing a revised 0.2 percent fall in March. However, manufacturers projected output in May to fall 2.3 percent before increasing again by 1.4 percent in June.

There was more good news from Japan today. Its unemployment rate fell to 4.4 percent in April from 4.5 percent in March while spending by Japanese wage earner households rose 3.6 percent in April from a month earlier.

Meanwhile, the potential for trade wars loom in the background -- over aircraft subsidies and textiles. And the following statement in this earlier report on the textile dispute appears quite accurate: "When it comes to trade and textiles, China is not afraid of playing hard ball."