Official Chinese PMI survey data indicate that China's aggregate economy expanded in April for the fourth consecutive month but at a slower pace, with the data showing renewed contraction in the manufacturing sector and weaker growth in the non-manufacturing sector. Authorities relaxed public health restrictions late last year, but today's data suggest that the recovery in economic conditions remains tentative and uneven across sectors.

The headline index for the CFLP manufacturing PMI fell from 51.9 in March to 49.2 in April, its lowest level since December and well below the consensus forecast of 51.5. The CFLP non-manufacturing PMI survey's headline index also fell from 58.2 to 56.4, below the consensus forecast of 56.8. The composite index covering the entire economy fell from 57.0 in March to 54.4 in April.

The CFLP manufacturing PMI is expected to slip 4 tenths in April to 51.5 after falling back 7 tenths to 51.9 in March. The non-manufacturing PMI, after jumping nearly 2 points to a much stronger-than-expected 58.2 in March, is expected to fall back 1.4 points to 56.8.

China Federation of Logistics and Purchasing (CFLP) Manufacturing Purchasing Managers Index (PMI) is the monthly survey of about 800 purchasing managers that is conducted jointly by CFLP and National Bureau of Statistics (NBS). The questions focus on the health of the manufacturing sector. The numeric result is a diffusion index. A reading above 50 indicates that manufacturing is growing. A reading below 50 indicates contraction.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The CLFP manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices. The survey tends to have a greater impact when it is released prior to the HSBC/Markit manufacturing PMI because the two reports are correlated.