China Retail Sales Slip as Ex‑Auto Spending Shows Modest Gain

Overview

• Official data show total retail sales in May fell into negative territory while spending on goods excluding automobiles posted a small increase, highlighting that big-ticket car purchases are distorting the aggregate picture.
• Monthly trends point to a multi-month slowdown with retail growth decelerating over recent months and moving below last year’s pace.
• China’s retail-sales measure covers firms above revenue thresholds, leaving the performance of smaller merchants and informal sellers unclear and potentially weaker than the headline suggests.
• House-price declines have reduced household net worth and, together with a rise in flexible or gig employment, are described as constraining income stability and consumers’ willingness to spend.
• Anecdotal reports show households cutting nonessential purchases and delaying replacements for items such as phones, which could depress discretionary demand and weigh on broader economic rebalancing efforts.