China's industrial output picks up in August as retail sales lose steam

China's industrial production accelerated in August, offering a rare bright spot in an otherwise subdued set of economic indicators released by the National Bureau of Statistics on Tuesday.

Factory output expanded 5.2% from a year earlier, up from a 4.5% rise in July and comfortably above the 4.8% increase analysts had projected in a poll of 42 forecasters.

The stronger reading suggests manufacturing activity regained some momentum midway through the third quarter, even as other parts of the economy struggled.

Consumer demand, by contrast, weakened further. Retail sales — the primary gauge of household spending — grew just 0.4% year-on-year, down from 0.6% in July and well short of the 0.8% rise analysts had expected.

Investment also remained a drag. Fixed-asset investment contracted 7.2% over the first eight months of the year, matching forecasts and steepening from a 6.7% decline recorded through July.

Taken together, the figures point to an uneven recovery in which industrial activity is holding up better than consumption and capital spending, the two pillars that policymakers have been trying to shore up.