Retail sales fell 0.6% year-on-year in May, signaling weakening domestic demand despite a 4.5% rise in industrial output.
China’s industrial output grew 4.5% year-on-year in May, exceeding forecasts of 4.2% and April’s 4.1% gain. The increase was partly driven by AI-related manufacturing exports, offsetting broader economic softness.
Retail sales contracted 0.6%, the first decline since December 2022, while fixed asset investment dropped 4.1%, nearly double the expected pace. Property investment fell 16.2% year-to-date, deepening concerns over structural demand weakness.
The unemployment rate edged down to 5.1%, though rising job displacement fears may weigh on consumer confidence. Commodity markets face headwinds as domestic demand lags despite export resilience.