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Four months ago, I wrote about losing 40 pounds on Mounjaro and wondered how I would do without the drug. It’s been an odyssey of binges, diets and exercise, but I’ve kept the weight off.

My food cravings came back at first with a whimper, then with a bang. I noticed them about three weeks after I took my last dose of a blockbuster medicine that helped me lose 40 pounds with shocking ease.

During the five months that I took Mounjaro, I had experienced what felt like freedom. My usual internal Greek chorus of a thousand voices, always telling me to eat, had been silent. French fries, doughnuts and Frosted Flakes no longer called to me. Then, I stopped taking the drug, a common choice for those using medicines like Mounjaro or Ozempic to lose weight. Cost was a primary factor; I was paying $1,000 a month myself because most insurance generally covers the drugs only for their primary use, combating diabetes. And despite the weight loss, I felt ambivalent about the idea of relying on the pharmaceutical help for life, as the drug makers recommend.

Then came the challenges of the next four months: a roulette wheel of binges, diets, exercise regimens and mental and emotional battles with myself over will power, self-image and motivation. It was remarkably like the struggles of overeating without taking a wonder drug first, though with one important difference: That wonder drug had given me the gift of a 40-pound head start, to either seize upon or squander.

In my case, there was a surprise revelation to process as well. After I published an essay in The Wall Street Journal in January about my weight-loss experience, my mother disclosed to me that she had been taking Ozempic, then Mounjaro, herself for more than a year. She lost just about as much weight as I did, but as the milestone of her 80th birthday approached, she sought to lose more—“I wanted to feel well,” she told me—so she opted to raise her dose, despite the daily bouts of nausea and gastric discomfort that followed.

She recounted for me her own experience with a lifetime of battling obesity, starting from her senior year in high school when she lost 15 pounds for graduation photos. Over the decades, she turned to one crash diet after another and seesawed in weight more than a dozen times. In her later years, she has endured almost constant pain from a variety of conditions, all made worse by her weight. Lately, she has also been racked with guilt over feelings of having passed such issues and struggles along to me, whether by nature or nurture. “I should have protected you from that,” she said.

As we talked, we bonded over the difficult duality of being overweight or obese: Often, you wish that you didn’t care and pledge that you can love yourself as you are. But then you start to wonder: Could I change?

Something like that has motivated the millions taking Mounjaro, Ozempic and similar drugs purely for weight loss. As the drugs’ popularity has surged, a number of clinical studies have shown that those who stop taking them can regain the lost pounds at a rapid clip. That has led drug manufacturers Eli Lilly and Novo Nordisk to recommend that patients stay on the medicines, perhaps for life. But most people are quitting: A recent analysis of thousands of insurance claims found that only a third of individuals who started such drugs for weight-loss were still taking them after a year.

Some people do get sustained benefits. In a study by Epic Research, more than half of participants either maintained their weight, or had lost more, a year after stopping the medicines; one in five had even doubled their weight loss. I was determined to be one of the success stories and to figure out what to do to keep the drug’s effects from fading.

When I stopped the Mounjaro, tortilla chips and salsa were the first “bad” food I wanted again. I only ate a handful at first, a minor dalliance. But within a few weeks, the dam started to break. After eating a normal-size salad for lunch while at work, I started feeling hungry about an hour later. I avoided snacking, but the cravings only grew. By dinner, I felt famished and ate to excess as soon as I got home: Not one but two plates of spaghetti, which I chased down with another round of chips and salsa. It was a familiar, and crushing, pattern. Within two months I gained back 5 pounds and wondered: Is this, already, when the music dies?

There was one clear bright spot: I had been liberated from an addiction to sugar, a miracle that has brought tremendous joy and relief. Since ending my course of Mounjaro, I still can’t finish a doughnut. And because I no longer want sugar on everything I eat (I used to put it on strawberries—or even already sugar-laced breakfast cereal), a lot of naturally sweet food is wonderful again. (Even so, I also adopted a sugar substitute, allulose, which helped reduce nighttime hunger pangs—it occurs naturally in foods such as figs and has about 70% of the sweetness of regular sugar.)

With my sweet tooth defanged, I started to research what I could do to feel more full—-to essentially replicate the effect of the medicine. Thus began what felt like an obsession with high-protein foods. In some scientific studies, diets higher in protein have been shown to help eaters feel full. They also complement weightlifting or resistance training, which research has shown can help reduce the risk of regaining weight after a period of dramatic weight-loss. After consulting with a friend and personal trainer, I set a high target of 150 grams of protein a day, above normal U.S. government recommendations but in a range aimed at people on resistance training trying to retain muscle mass.

At first, it worked. The more protein I had, the less hungry I felt. It offered a respite from the voices. I ramped up my exercise to about 12 hours a week, half of it in the weight room, and started eating meat and cheese like a heavyweight champ. Steak and eggs in the morning, buffalo chicken and rice for lunch and brisket for dinner. I replaced chips and salsa with jicama and high-protein cottage cheese. It felt like I had beef jerky and peanuts or cashews all day long, and when I wasn’t eating those I was dousing one thing after another in protein powder.

Eventually, I got meat fatigue: It got harder and harder to eat that second or third helping of dried, barbecue-flavored Korean pork. I started looking to fiber, which also helps increase satiety. Avocados, blueberries and certain other fruits and vegetables were a much-needed respite from protein, and ultimately I reduced my protein goal by half and instead tried to keep the calories lower—a little under 1,800 a day.

So far, the hard work has been successful. I lost back the 5 pounds, and I’m still at roughly my post-Mounjaro weight. Recently, I began training to summit Mount Whitney, California’s tallest peak, which will require even more exercise and may lead to even more weight loss, if the past is a benchmark.

Even so, I’m staying cautious. I didn’t get rid of my too-big clothes until just last week—a ritual that always fills serial dieters like me with a peculiar combination of excitement and dread. The dread comes from the question: How long will it be before any new and lovely clothes I buy won’t fit anymore? Still, since I was at the lowest weight I had seen in years, I decided to try out a new look. I emulated former Apple designer Jony Ive by shaving my head and trimming my beard down to stubble and by adopting fitted T-shirts. My kids were unimpressed. I had to admit they weren’t wrong. For years, I had imagined that a new style and wardrobe would complete my Pygmalion story. But there I was being teased mercilessly by my 13-year-old son. I’m letting the hair grow back now.

Overall, I found myself feeling more conflicted about my gaunter self. Having pined to be thin for so long, once it became somewhat routine, I was surprised to be a little underwhelmed.

My feeling reminded me of a great scene from “Lonesome Dove,” the Pulitzer Prize-winning novel by Larry McMurtry. I remember Gus, an old Texas ranger played by Robert Duvall in the TV miniseries, comforting a paramour who can’t let go of her dream of being a “fancy lady” in San Francisco. “Life in San Francisco is still just life,” Gus says in the book. “If you want one thing too much it’s likely to be a disappointment.” He urges her, instead, “to learn to like all the everyday things,” like a soft bed or a glass of buttermilk.

Life as a thin person trying to stay that way, it turns out, is like that—still just life. The same struggles, the same need to enjoy the little things to compensate. The Pygmalion story goes on.

Things look strong on paper, but many Americans remain unconvinced. We asked economic officials, the woman who coined “vibecession” and Charlamagne Tha God what they think is happening.

The U.S. economy has been an enigma over the past few years. The job market is booming, and consumers are still spending, which is usually a sign of optimism. But if you ask Americans, many will tell you that they feel bad about the economy and are unhappy about President Biden’s economic record.

Call it the vibecession. Call it a mystery. Blame TikTok, media headlines or the long shadow of the pandemic. The gloom prevails. The University of Michigan consumer confidence index, which looked a little bit sunnier this year after a substantial slowdown in inflation over 2023, has again soured. And while a measure of sentiment produced by the Conference Board improved in May, the survey showed that expectations remained shaky.

The negativity could end up mattering in the 2024 presidential election. More than half of registered voters in six battleground states rated the economy as “poor” in a recent poll by The New York Times, The Philadelphia Inquirer and Siena College. And 14 percent said the political and economic system needed to be torn down entirely.

What’s going on here? We asked government officials and prominent analysts from the Federal Reserve, the White House, academia and the internet commentariat about what they think is happening. Here’s a summary of what they said.

KYLA SCANLON, COINER OF THE TERM ‘VIBECESSION’

Price levels matter, and people are also getting some facts wrong.

The most common explanation for why people feel bad about the economy — one that every person interviewed for this article brought up — is simple. Prices jumped a lot when inflation was really rapid in 2021 and 2022. Now they aren’t climbing as quickly, but people are left contending with the reality that rent, cheeseburgers, running shoes and day care all cost more.

“Inflation is a pressure cooker,” said Kyla Scanlon, who this week is releasing a book titled “In This Economy?” that explains common economic concepts. “It hurts over time. You had a couple of years of pretty high inflation, and people are really dealing with the aftermath of that.”

But Ms. Scanlon also pointed out that knowledge gaps could be part of the problem: A Harris poll for The Guardian this month found that a majority of Americans (incorrectly) believed that the United States was in a recession. About half said they believed the stock market was down from last year, though it is up considerably.

“Yes, there is economic frustration, but these are objectively verifiable facts,” she said.

RAPHAEL BOSTIC, PRESIDENT OF THE FEDERAL RESERVE BANK OF ATLANTA

Part of this is about memory.

A big question is why — when the economy is growing, unemployment is historically low and stock prices are climbing — things feel so dim.

“When I talk to folks, they all tell me that they want interest rates to be lower, and they also tell me that prices are too high,” Raphael Bostic told reporters last week. “People remember where prices used to be, and they remember that they didn’t have to talk about inflation, and that was a very comfortable place.”

Mr. Bostic and his colleagues at the Fed have raised interest rates to a more-than-two-decade high in an effort to bring down the rapid price increases, and he said the key was wrestling inflation back to normal quickly.

JARED BERNSTEIN, CHAIRMAN OF THE WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS

Catching up with inflation takes time.

As inflation cools, there is some hope that the negativity could fade. Jared Bernstein noted that for the past 14 months, middle-class wage growth has been beating inflation, and predicted that people would feel better as wages caught up to higher price levels.

“If that were wrong, everyone would be walking around eternally upset that gas doesn’t cost $1 a gallon,” Mr. Bernstein said. “The two components of that adjustment are time plus rising real pay.”

LORETTA MESTER, PRESIDENT OF THE CLEVELAND FED

Wages have lagged.

But not everyone has broken even at this point, and that could be part of the explanation behind the continued pessimism. On average, pay gains have not fully caught up with the jump in prices since the start of the pandemic, if you compare Consumer Price Index increases with a wages and salary measure that Fed officials watch closely.

“They still haven’t made up for all of the lost ground,” Loretta Mester said. “They’re still in a hole, a little bit.”

Ms. Mester noted that people were also struggling to afford houses, because prices have shot up in many places and high interest rates are making first-time homeownership difficult, putting that part of the American dream out of reach for many.

LAWRENCE H. SUMMERS, HARVARD ECONOMIST AND COMMENTATOR

Interest rates are part of the issue.

That touches on an issue that Lawrence H. Summers recently raised in an economic paper: For most people, the higher interest rates that the Fed is using to try to slow demand and squash price increases feel like just another form of inflation. In fact, if high interest rates are added into inflation, that explains most of the gap between where consumer confidence is and where one might expect it to be.

“The experienced cost of living is much greater than inflation as reflected by the Consumer Price Index,” Mr. Summers said in an interview. He noted that consumer confidence improved when market-based rates, which feed into mortgage and leasing costs, eased early this year, then sank again as they rose.

CHARLAMAGNE THA GOD, RADIO HOST

People remember more comfortable times.

Whatever is causing the unhappiness, it seems to be translating into negativity toward Mr. Biden. In the recent Times poll, many said they thought the economic and political system needed to be changed, and fewer said they thought that Mr. Biden, as opposed to former President Donald J. Trump, would usher in big alterations.

Charlamagne Tha God recently suggested on “The Interview,” a Times podcast, that Black voters in particular might be turning from Mr. Biden and toward Mr. Trump because they associated the former president with the last time they felt financially secure. Mr. Trump’s administration sent out two rounds of stimulus relief checks, which Mr. Trump signed. Mr. Biden sent out one, which he did not. And inflation began to pop in 2021, after Mr. Trump left office.

“People are living paycheck to paycheck,” Charlamagne said during a follow-up interview specifically about the economy. “You don’t know struggle until you’ve had to decide whether you’re going to pay for your car or pay for your rent.”

To his point, rents are up drastically since before the pandemic, and auto loan delinquencies are rising sharply. While inflation and higher interest rates have been a global phenomenon, people tend to blame the current economic challenges on whoever is in office.

“People can’t see past their bills,” Charlamagne said. “All we want is upward mobility and security, and whoever can provide that, even for a fleeting moment, you never forget it.”

SUSAN COLLINS, PRESIDENT OF THE BOSTON FED

People are anxious postpandemic.

In fact, the recent economy has offered something of a split screen: Some people are doing really well, watching their retirement portfolios improve and their home prices appreciate. But those people were often already well off. Meanwhile, people carrying credit card balances are facing much higher rates, and many Americans have exhausted whatever savings they managed to amass during the pandemic.

“There are groups that are doing really, really, well, and there also are groups that are struggling,” Susan Collins said. “We talk to individuals who are having a lot of trouble making ends meet.”

But she also noted that the period since the pandemic had been wrought with uncertainty. Changes to interest rate policies, years of inflation, and headlines about war and geopolitical upheaval may have shaken how people view their economic situations.

“I think that there is a different level of anxiety postpandemic that is hard to rule out,” Ms. Collins said.

AARON SOJOURNER, THE W.E. UPJOHN INSTITUTE

Some of this may be about media negativity.

Still, there’s one enduring mystery about the vibecession. People tend to be more optimistic about their personal economic situations than they are about the economy as a whole.

That could be because Americans rely on the media for their perception of national economic conditions, and news sentiment has grown more downbeat in recent years, said Aaron Sojourner, who recently wrote a study suggesting that economic news coverage has become more negative since 2018, and much more negative since 2021.

“For the last six years, the tone of economic news has been considerably more sour and negative than would be predicted based on macroeconomic variables,” he said.

But he acknowledged that journalists factored in real experiences and consumer sentiment data into their reporting, so it is difficult to know to what degree bad vibes are driving negative news and how much negative news is driving bad vibes.

“Does the sentiment cause the news, or does the news tone cause the sentiment? I don’t know,” Mr. Sojourner said.

The company has also been expanding its own store base to boost full-price selling in its direct-to-consumer channel, where its products are sold largely above the average selling price at wholesale shops.

Birkenstock raised its annual revenue and core profit forecasts on Thursday as the German sandal maker bets on full-price selling and strong demand for its cork-based sandals and newer closed-toe styles, sending its shares up 10 percent premarket.

Most wholesale retailers are still stocking up on in-demand Birkenstock products despite a wider effort to cut back on inventory as demand for discretionary items such as footwear remains under pressure.

Birkenstock has also been expanding its own store base to boost full-price selling in its direct-to-consumer channel, where its products are sold largely above the average selling price at wholesale shops.

This helped second-quarter DTC revenue grow more than 30 percent, while wholesale revenue rose 19.2 percent.

Birkenstock’s closed-toe footwear has been growing in popularity, with the category bringing in more than a quarter of the company’s total second-quarter revenue, compared with a high-teens percentage a year earlier.

The company now expects fiscal 2024 revenue between 1.77 billion euros and 1.78 billion euros, up from a prior forecast of 1.74 billion euros to 1.76 billion euros.

It forecast annual adjusted earnings before interest, taxes, depreciation, and amortisation between 535 million euros and 545 million euros, up from 520 million euros to 530 million euros expected earlier.

However, Birkenstock’s quarterly adjusted EBITDA margin was down 470 basis points to 33.7 percent due to pressures from its plans to expand globally and invest more in production.

“Investors are focused on the impact of this DTC expansion ... if that is done successfully it will reduce the volatility in the business which traditionally comes with wholesale exposure and they will have a stronger control over the brand,” said Javier Gonzalez Lastra, luxury-focused portfolio manager at Tema ETFs.

Birkenstock’s second-quarter revenue rose 21.6 percent to 481.2 million euros ($520.23 million), compared with LSEG estimates of 466.1 million euros. Adjusted profit per share came in at 0.41 euros, beating estimates of 0.36 euros.

Fusion Funding Has Fizzled

As factories and manufacturing facilities have gotten “smarter” through sensors, robotics and other connected technologies, this has created a potential treasure trove of data that can be mined for insights on bottlenecks and other areas for improvement. Or maybe even to just expedite processes that would otherwise require significant manual spadework.

But much of this generated data is unstructured and not easy to harness off the bat. While big data analytics has for years been a mainstay of industries such as finance and logistics, it hasn’t fully made its way into the manufacturing realm. This has created an untapped gold mine of insights, and more recently a nascent market for technologies designed both to capture and make sense of a vast array of manufacturing data.

Last month, U.K.-founded Oden Technologies, now based in New York, raised a $28.5 million Series B round to spur growth for its data analytics platform for manufacturers. Germany’s Daedalus raised $21 million to apply AI to precision-manufacturing factories. And Belgium’s Robovision secured $42 million to bring computer vision intelligence to industrial machinery.

Now it’s EthonAI’s turn, as the Swiss startup announced Thursday that it has raised CHF 15 million ($16.5 million) in a Series A round of funding led by Index Ventures, with participation from General Catalyst, Earlybird and Founderful.

EthonAI finds the defects in products

Founded out of Zurich in 2021 by CEO Julian Senoner and CTO Bernhard Kratzwald, EthonAI can train AI models for specific use cases, for instance in electronics manufacturing where the customer supplies imagery of defect-free products and EthonAI’s Inspector software can then identify surface defects in the products during the manufacturing and assembly process. Apple recently acquired a company called DarwinAI that serves a similar purpose, in terms of automating the visual quality management process in component manufacturing.

More broadly, though, EthonAI can combine data from across a company’s manufacturing setup, from sensors to line stops, and build a picture of where things are and aren’t working well — and even compare performance across multiple facilities to see where there might be room for improvement.

In its three-year history, EthonAI has amassed some fairly high-profile customers including Siemens and chocolate-maker Lindt.

Digging down into EthonAI’s target markets reveals that semiconductor manufacturing is one particular area of focus, though the company hasn’t divulged any specific customers in this space. However, low yield is a known concern in the chip sector, where defects in the silicon wafers can affect the number of actual usable chips post-production. Notably, Apple reportedly reached an agreement last year with chipmaker TSMC that apparently had particularly low yield rates (just 55% at the time), with Apple striking a deal to pay only for known good wafers — saving billions of dollars in the process.

EthonAI, for its part, says it works with a “leading semiconductor producer” that uses its platform to merge multiple datasets to conduct analysis and spot previously unknown relationships between processes, equipment and yield rates.

“Manufacturing is at a critical juncture, and companies that fail to adapt with AI risk falling behind,” Senoner said in a press release. “Factories are producing mountains of data and AI is the key to unlocking insights to drive operational excellence.”

Eric Lefkofsky knows the public listing rodeo well and is about to enter it for a fourth time. The serial entrepreneur, whose net worth is estimated at nearly $4 billion, has already taken three businesses he’s founded public.

Today he’s the founder of Tempus, a genomic testing and data analysis company preparing to IPO. But he’s best known as the co-founder of daily deals pioneer Groupon, which went public at a valuation of nearly $13 billion in 2011, in one of that year’s most high-profile debuts.

Groupon’s IPO and post-IPO years were infamously troubled, though the public listings of his other two companies — InnerWorkings in 2006 and Echo Global Logistics in 2009 — didn’t raise significant flags for investors and did well for Lefkofsky. InnerWorkings, a supply chain startup he founded in 2001, sold to private equity in 2021 for a fraction of its IPO market cap.

Meanwhile, the stock of Echo Global Logistics appreciated steadily during its 11-year public life history before also being sold to private equity at a 50% premium over its last trading price in 2021.

Some of the controversies with Groupon involved a report that Lefkofsky pocketed over $300 million from Groupon’s pre-IPO round, leaving little working capital for the company, and cutting its reported revenue in about half in revised S-1 filings after regulators scrutinized the financials in its initial S-1. That unorthodox decision has also brought to light another deal from his past. He sold his dot-com-era company Starbelly.com in 2000 to a 50-year-old company; a year later, that company filed for bankruptcy, according to some reports.

All of this has given Lefkofsky the reputation of having somewhat of a golden touch, at least for himself, but maybe not for long-term investors of his companies.

With Tempus, Lefkofsky is taking another shot at creating a long-lasting, valuable company. It was reportedly his wife’s successful breast cancer treatment that led him to found Tempus in 2015.

“I was perplexed at how little data was a part of her care,” he told Forbes last year. “I became fixated with this idea that there was all this technology that had been created for other industries that could be applied to cancer care and help physicians make data-driven decisions.”

He stepped down from Groupon’s CEO role in 2015, when the company’s value had fallen to $2.6 billion. (Groupon’s market cap today is around $600 million.) At that time, Lefkofsky focused his attention on an early-stage venture firm, Lightbank.

Interestingly, the Tempus S-1 filing says that he’s taken no salary for the past two years (the S-1 didn’t provide more than two years’ worth of executive compensation for any named officer). However, the filing also said that he’s due to be paid $800,000 and an $800,000 bonus starting in 2025. And, although he wasn’t drawing a salary, he was paid a $5.3 million dividend from company stock this year, the prospectus shows. The filing also showed that Tempus has also covered the cost of $7.5 million worth of preferred shares issued to him and has paid $200,000 for his private plane expenses.

Tempus’ revenues were $531 million in 2023, a 66% growth from $321 million in 2022. But the company is still hemorrhaging a lot of cash, with net losses of $290 million (in 2023) and $214 million (in 2022). Although, the silver lining in its financials is that operating loss margin has shrunk from 83% in 2022 to 37% in 2023, according to the S-1 filing.

Additionally, Tempus has an agreement with Pathos AI, another company Lefkofsky founded. Pathos AI is a drug discovery platform founded in 2020. Pathos pays Tempus for a right to license its data. Meanwhile, Tempus’ COO, Ryan Fukushima, serves as Pathos’ CEO and splits his time between the two companies.

There are other indications that Lefkofsky is exercising more power at Tempus than is customary.

While Tempus has not yet filled out its principal stockholder’s chart, revealing only that Lefkofsky is among them and owns at least 5% of the company, the billionaire clearly wants to preserve full control of the company after it goes public. Tempus has granted his shares a whopping 30 votes per share. Super voting shares are not unusual, but 10 votes per share is more common, with 20 votes considered high. So this is an unusually high shareholder influence for a CEO of a healthcare company, and we’ll have to see if it is reduced in future S-1s, indicating whether prospective investors have balked at it.

Yet, Tempus’s S-1 may not be exaggerating how essential Lefkofsky is to the future of the company. A healthcare VC investing in companies in genomics and data analysis has told TechCrunch that Tempus would not have grown to its size, nor garnered so much capital without Lefkofsky’s marketing and fundraising skills.

Tempus raised $1.42 billion in funding from investors, including his firm Lightbank, as well as from NEA, Revolution Growth, T. Rowe Price, Novo Holdings, Franklin Templeton and Baillie Gifford. The company was last valued at $8.1 billion in October 2022. Tempus’ S-1 filing also revealed that it recently received $200 million from SoftBank.

Regardless of how much capital Tempus raises in its IPO, the company’s prospectus made it clear that it’s still far from breakeven and will need “to raise additional capital in the future.” While most unprofitable companies generally include this detail in their prospectuses, it is likely that investors will expect Tempus to have a follow-on public offering at some point, which could be a drag on their share price.

Tempus is also trying to position itself as an AI company even though AI revenue accounted for only $5.5 million of revenue, approximately 1% of total revenue in 2023.

“I see Tempus gambling on their growth and ripe timing for AI across life sciences, but I don’t think the company has proven that yet with their current offering,” the healthcare investor said.

The company said in its S-1 filing that while its “AI product line is nascent, it plans to embed AI, including generative AI, in every aspect of its diagnostic tools.” Tempus declined to comment beyond what is listed in the S-1.

China’s official manufacturing PMI fell to 49.5 in May from 50.4 in April

An official gauge of China’s manufacturing activity unexpectedly slid into contraction in May, snapping a two-month run of growth as market demand shrank sharply, contrasting recent optimism about the economy.

The manufacturing purchasing managers index fell to 49.5 in May from 50.4 in April, the National Bureau of Statistics said Friday. That put the index below the 50 mark that separates growth in activity from contraction.

May’s result also undershot expectations of economists polled by The Wall Street Journal, who had anticipated the print to stay steady at 50.4.

The data comes as policy efforts to stimulate demand and revive the property sector have lifted hopes that China’s economic recovery is solidifying.

Equities markets seemed to shrug off the news, with benchmark indexes in China and Hong Kong gaining Friday morning after opening higher.

May’s surprise drop was largely due to insufficient demand, said Zhao Qinghe, a senior statistician with the statistics bureau. Unfavorable effects from a high base formed earlier this year were also in play, Zhao added.

Friday’s data showed that the subindex tracking production declined to 50.8 in May from 52.9 in April. The new orders gauge fell into contraction in May, slipping to 49.6 from 51.1 in April, while that for new export orders followed suit, dropping to 48.3 from 50.6.

“China cannot depend only on exports to drive its economy. The fiscal policy needs to become more proactive to boost domestic demand,” said Zhiwei Zhang, an economist at Pinpoint Asset Management.

Despite the drop in headline PMI, large manufacturers in China reported a faster expansion in May. However, activity at medium-size companies shrank after growing the prior month, while small companies slid deeper into contraction, official data showed.

China’s nonmanufacturing PMI, which covers service and construction activity, also fell in May but stayed in growth territory. The index declined to 51.1 from 51.2 in April, the statistics bureau said.

The subindex tracking service activity rose to 50.5 in May from 50.3 in April, while the construction subindex fell to 54.4 from 56.3.

The release follows Beijing’s rollout of a suite of measures to bolster the property sector, the downturn of which has dented market confidence and consumer spending.

While there are still doubts about the efficacy of the policy push, authorities’ more supportive stance, coupled with better-than-expected economic growth in the first quarter, have prompted many institutions to upgrade their forecasts for China’s economic growth.

The International Monetary Fund earlier this week upgraded its projection for China’s economic growth this year to 5.0% from 4.6%. The latest forecast is in line with Beijing’s target for this year.

The May PMI prints may send a warning sign for growth, said ING’s Lynn Song, chief economist for Greater China. But it is advisable to not overly rely on survey data, which can be fickle, he said in a note.

“Disappointing data could also increase urgency to expedite policy rollout,” he added.

Shares of the Shanghai-based company rose 10%

NIO’s NIO 9.53%increase; green up pointing triangle shares rose sharply in Hong Kong on expectations the Chinese electric-vehicle maker’s deliveries would likely hit a record high in May.

Shares of the Shanghai-based company rose 10% to 42.10 Hong Kong dollars (US$5.38).

Analysts said NIO could deliver more than 20,000 vehicle units in May. The company previously hit a monthly sales record of 20,462 units in July last year.

The strong sales could be due to continued discounts on car prices and batteries, BOCOM International auto analyst Angus Chan said.

The company slashed monthly fees for its BaaS battery-rental services in March, which boosted orders.

NIO’s April deliveries more than doubled to 15,620 units from a year earlier, its fastest growth since October 2022. It has set an annual sales target of between 180,000 units and 200,000 units for 2024.

The EV sector is broadly higher in Hong Kong in early trade. XPeng rose 4.7% and Li Auto was up 3.3%.

China has been stepping up efforts to boost EVs, with the state council unveiling a decarbonization action plan that would gradually remove curbs on purchases of new-energy cars.

Steelmaker argues plans approved by Medway Council threaten facility supplying construction industry and 800 jobs

ArcelorMittal on Thursday called on the next UK government to block a local authority’s approval of the redevelopment of docks in south-east England that the steel group uses to supply materials to the construction industry.

The world’s second-largest steel producer warned that Medway Council in Kent giving the green light to plans for Chatham Docks by regeneration specialist and site owner Peel Waters threatened one of its main UK operations and could lead to the loss of 800 jobs. 

ArcelorMittal, which imports and processes reinforcing “rebar” steel on the site and whose lease there ends in 2025, has previously described it as a “strategic asset” for the UK economy. Its products have helped to build several high-profile infrastructure projects including London’s Elizabeth Line, the high-speed HS1 rail route and Heathrow Terminal 5. 

Phil Taylor of ArcelorMittal Kent Wire, the affected subsidiary, said the decision “brings the decimation of Chatham Docks and the loss of 800 direct jobs one step closer”.

“It all now rests with the next secretary of state to intervene and stop this threat to the UK construction sector.”

Medway’s planning committee on Thursday voted eight to seven in favour of Peel Waters’ plans to develop the docks for commercial and housing facilities.

Despite that vote, the final decision rests with the next government. An original planning motion on the plans scheduled for earlier in May was deferred after Michael Gove, the levelling up secretary, intervened following an appeal by ArcelorMittal and issued temporary restrictions. 

The intervention by Gove, who has since decided not to stand in the upcoming general election on July 4, means that the government could scrutinise the proposals before deciding whether to call them in for review. 

The fact that the application was “rushed through even with a holding direction in place is shameful”, said ArcelorMittal’s Taylor. 

Medway Council said a report would be sent to the secretary of state for levelling up “who will determine whether to call in the decision for a public inquiry”.

Peel Waters welcomed the decision by the council. It said its plans would transform the existing brownfield land into “adaptable workspace . . . and the opportunity to create hundreds of new jobs and apprenticeships”. It also plans to open up part of the waterfront to the public.

British tech entrepreneur quizzed by US prosecutors as trial enters final stages

British tech entrepreneur Mike Lynch attempted to downplay US prosecutors’ allegations about backdated contracts, inconsistent revenue figures and relationships with analysts and press during testimony in one of the biggest fraud cases ever to hit Silicon Valley.

Lynch, the former chief executive of UK software company Autonomy, has been charged with multiple counts of wire fraud and conspiracy. He is accused by US prosecutors of inflating his company’s revenues by tens of millions of dollars, which led Hewlett-Packard to overpay in a $11.5bn acquisition.

The 2011 Autonomy deal had been central to HP’s efforts to reinvent itself as a software company, but within a year the American company wrote down the value of the business by $8.8bn. As its strategy foundered, HP laid off more than 100,000 workers and eventually split up.

Lynch, who has pleaded not guilty, decided to take the stand in his own defence, a relative rarity in white-collar fraud trials. Following questioning from his own lawyers last week, US prosecutors cross-examined Lynch for one-and-a-half days at court in San Francisco this week, challenging him on dozens of internal Autonomy emails and financial reports exchanged between its management and HP executives.

Dressed in a black suit and regularly talking directly to the jury, Lynch sought to portray the limits of his former role, repeatedly claiming he did not understand certain spreadsheets prepared by Autonomy executives about its financial performance.

“The CEO doesn’t do those things, you don’t do the accounting, you don’t do the customer support . . . You have a department that does [those things] and you set a culture for what you want them to do,” he said.

During cross-examination on Thursday, US prosecutors displayed emails that appeared to show a software contract had been backdated by one of Lynch’s sales team in order to recognise revenue in an earlier quarter, helping to boost gross margins closer to Wall Street targets. Lynch said it was “incorrect” to suggest he had been involved in any discussion relating to the contract’s date.

Lynch was also questioned about his relationship with a Deutsche Bank analyst, Marc Geall, who had previously worked at Autonomy. In 2010 the analyst criticised Autonomy’s financial position, claiming that without certain hardware sales its “organic growth rate will be next to nothing”.

Prosecutors asked whether Lynch had “ever threatened to destroy people in the UK press” and whether he had “burnished his corporate image in advance of a sale” of Autonomy, although he did not go into further detail.

Lynch said: “I don’t have any connections in the UK press capable of destroying people.”

A further set of questions related to a document prepared by Autonomy executives to discuss potential analysts’ questions during an earnings call in 2010. Prosecutors said Lynch had written “WAFFLE IT” as advice to his team if asked about Autonomy’s operating revenue.

Lynch said he did not recall whether he had written that and that the process of drafting responses “is not the process I am used to”.

Also among the emails presented by the prosecution was correspondence between Lynch and Sushovan Hussain, the former chief financial officer at Autonomy, who was convicted of fraud in 2018 and sentenced to five years in prison. Hussain raised concerns in a number of emails between 2009 and 2011, including that Europe revenues had been a “disaster” in 2009.

Lynch said the emails were part of the “sausage-making” that goes into closing a company’s quarterly accounts.

Lynch, 58, is standing trial alongside Stephen Chamberlain, Autonomy’s former vice-president of finance, on 15 charges that carry potentially lengthy prison sentences. Lynch also faces a charge of securities fraud.

The trial is in its final stages after around two months of evidence and witnesses taking the stand, with jury deliberations expected next week.

Lynch was extradited to the US last year, forcing him to live under house arrest and 24-hour surveillance in San Francisco. He separately lost a civil case in London in 2022 to HP, which is seeking $4bn in damages.