China: Consumer spending remains solid
June 11, 2011
In May, nominal retail sales grew 16.9% over the same month last year. The reading slightly undershot the previous month's 17.1% increase, but was broadly in line with market expectations of a 17.0% expansion. In the first five months of the year, retail sales have gained 16.6% (January-April 2011 period: +16.5% year-on-year). The increase in retail sales partly reflected strong growth in petroleum and related products, which jumped 42.3% (April: +39.7% yoy). On the other hand, automobile sales rose a more subdued 13.6% (April: +13.2%). The moderation in consumption was in line with softening levels of consumer confidence seen in May. According to the survey conducted by Xinhua News Agency and China UnionPay, consumer confidence fell in the wake of rising food prices caused by drought. The household confidence index tracks expenses of credit card users, including 200,000 individuals in affluent cities. Seasonally adjusted data provided for the first time by the National Bureau of Statistics show that retail sales expanded 1.28% in May over the previous month, virtually matching April's reading of 1.29%.