A worker uses a thermometer to check a customer’s temperature as they enter a Starbucks store while the country is hit by the new coronavirus outbreak in Beijing, China on Jan. 30, 2020.
A worker uses a thermometer to check a customer’s temperature as they enter a Starbucks store while the country is hit by the new coronavirus outbreak in Beijing, China on Jan. 30, 2020.
BEIJING – As the latest sign of a sluggish recovery from the coronavirus pandemic, China said on Monday that consumer spending grew more slowly than expected in April.
Retail sales rose 17.7% year over year last month, the National Bureau of Statistics said on Monday. According to analysts polled by Reuters, this fell short of expectations of 24.9% growth in April.
Retail sales in April also slowed from 34.2% year over year in March.
“China is still experiencing an unbalanced recovery as employment, household income, consumption, manufacturing investment, the service sector and private businesses have not yet returned to pre-pandemic levels,” Bruce Pang, director of macro and strategic research at China Renaissance, said in one Explanation.
Catering sales, which also include restaurants, rose 46.4% year over year in April from 91.6% in March.
Online sales of consumer goods rose 23.1% year over year in the first four months of the year, slower than the growth rate of 25.8% in the first three months of the year. The statistics bureau has not published any growth rates for a month.
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.
The urban unemployment rate fell from 5.3% in March to 5.1% in April, but the average number of hours worked fell from 46.9 hours in March to 46.4 hours last month.
Consumption has left China’s macroeconomic recovery from the coronavirus pandemic behind. Retail sales declined last year despite the expansion of China’s GDP – the only major economy that grew last year.
“The travel, leisure, and entertainment sectors are a busy place for a lot of people,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note. “The uncertainty of Covid is still holding these sectors back.
“Economic growth is likely to have peaked quarter over quarter in the first quarter,” he said, reckoning that growth will slow in the coming months and that the likelihood of a rate hike by the central bank has decreased.
In yet another sign of persistent consumption weakness, Chinese tourist travel surged to a record high during the May 1-5 holidays, but spending was still below 2019 levels.
Other April numbers showed steady growth in non-consumer sectors.
Industrial production rose 9.8% in April, in line with Reuters’ expectations.
Fixed investment rose 19.9% in the first four months of the year, slightly above the 19% forecast by a Reuters survey.
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