BEIJING — In the latest sign of a sluggish recovery from the coronavirus pandemic, China said Monday that consumer spending grew at a slower-than-expected pace in April.
Retail sales rose 17.7% last month from a year ago, the National Bureau of Statistics said Monday. That missed expectations of 24.9% growth in April, according to analysts polled by Reuters.
April’s retail sales figure also marked a slowdown from 34.2% year-on-year growth in March.
“China is still seeing an unbalanced recovery, as employment, household income, consumption, manufacturing investment, (the) service sector and private firms have yet to come back to (the) pre-Pandemic level,” Bruce Pang, head of macro and strategy research at China Renaissance, said in a statement.
Catering sales, which includes restaurant dining, grew 46.4% year-on-year in April, down from 91.6% in March.
Online sales of consumer goods rose 23.1% during the first four months of the year from a year ago, a slower pace than the 25.8% growth rate of the first three months of the year. The statistics bureau did not release single-month growth rates.
Foundation for recovery is ‘not yet solid’
In a quarterly monetary policy report released last week, the People’s Bank of China noted that the foundation for economic recovery is not yet solid and consumer spending remains constrained.
On Monday, the Statistics Bureau reiterated that the foundation for the economic recovery is not yet solid.
The urban unemployment rate fell to 5.1% in April, down from 5.3% in March, but the average number of hours worked a week declined to 46.4 hours last month, from 46.9 hours in March. The unemployment rate for those aged 16 to 24 remained a high 13.6%, the data showed.
Consumption has lagged China’s overall economic recovery from the coronavirus pandemic. Retail sales contracted last year despite expansion in China’s GDP — the only major economy to grow last year.
“Sectors related to travel, leisure and entertainment employ a lot of people,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note. “The Covid uncertainty still holds these sectors back.
“Economic growth likely peaked in Q1 on a quarter-on-quarter basis,” he said, noting he expects growth to slow in coming months and that the probability of a central bank rate hike has declined.
In another sign of persistent weakness in consumption, Chinese tourist trips during the May 1 to 5 Labor Day holiday surged to a record, but spending still fell short of 2019’s levels.
Growth in other parts of the economy
Other figures for April showed steady growth in non-consumer sectors.
Industrial output rose 9.8% in April, matching Reuters’ expectations.
Fixed asset investment for the first four months of the year rose 19.9%, slightly above the 19% figure predicted by a Reuters poll.
Earlier this month, China’s customs agency said exports grew a more-than-expected 32.3% in April from a year ago.
Source: Business - cnbc.com
