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Inventories subtracted 1.3 percentage points from headline GDP growth in the second quarter and were by far the biggest constraint on the economy. This was the fifth straight drag from inventories, but it was more than twice the average hit over the previous year.
We've always said that China's first weapon, should the trade war escalate, is to do nothing and allow the RMB to depreciate.
The August NFIB survey of activity and sentiment at small businesses was soft, but it could have been worse.
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