China’s retail sales surprise with faster growth, up 4.6% in August

BEIJING — China’s retail sales and industrial production picked up pace in August with better-than-expected growth, according to National Bureau of Statistics data released Friday.

Retail sales grew by 4.6% in August from a year ago, beating expectations for 3% growth forecast by a Reuters poll. The increase was also faster than the 2.5% year-on-year pace in July.

Industrial production grew by 4.5% in August from a year ago, better than the 3.9% forecast and faster than the 3.7% increase reported for July.

Fixed asset investment, however, grew by 3.2% year-on-year in August on a year-to-date basis. That missed expectations for a 3.3% increase and was slower than the 3.4% pace reported as of July.

The figure was dragged down by a steeper drop in real estate investment, and a slowdown in infrastructure investment. Only manufacturing saw the pace of investment pick up.

The urban unemployment rate for cities was little changed at 5.2%. The statistics bureau again did not report the jobless rate for young people. It said last month it will stop reporting the unemployment rate for young people ages 16 to 24. The bureau said it was reassessing its methodology, and would resume releases at an unspecified date.

China’s economic rebound from the pandemic has slowed since the second quarter, dragged down by a real estate slump. Exports, another key driver of China’s economy, have also dropped as global demand for Chinese goods wanes.

The statistics bureau release described August data as showing “marginal improvement.”

“The national economy showed good momentum of recovery with high-quality development making solid progress and positive factors accumulated,” the statistics bureau release said. “However, we should be aware that many unstable and uncertain factors in the external environment still exist.”

Within retail sales, online sales of physical goods rose by 7.6% in August from a year ago, according to CNBC calculations of official data accessed via Wind.

Autos saw sales rise by 1.1%. Among the categories with faster growth were cosmetics, up by 9.7% and communication equipment, up by 8.5% in August from a year ago. Catering sales grew by 12.4% during that time.

Late Thursday, the People’s Bank of China said that it was cutting the amount of cash that banks need to have on hand by 25 basis points, effective Friday. It was the second reserve requirement ratio cut this year since one in March.

In the last several weeks, Beijing has announced a slew of measures to support the real estate market and consumption.

Monetary policy has remained relatively loose compared with aggressive rate hikes in the U.S. and Europe.

Also effective Friday is a reduction in the foreign exchange reserve requirement ratio for financial institutions to 4%, from 6%. The planned cut was announced two weeks ago.

The central bank has also trimmed other benchmark rates, such as the one-year loan prime rate.

Uncertainty about future income has kept consumer spending relatively muted.

China’s consumer price index rose by 0.1% year-on-year in August, reversing a decline in July. Core CPI, which excludes food and energy prices, increased by the same 0.8% year-on-year pace during both months.

— This is breaking news. Please check back for updates.