CN: Retail Sales

Tue Oct 18 21:00:00 CDT 2016

Consensus Actual Previous Revised
Y/Y % Change 10.6% 10.7% 10.6%
M/M % Change 0.85% 0.83% 0.87%

Retail sales in China rose 10.7 percent on the year in September, just above with the consensus forecast of 10.6 percent and the 10.6 percent growth recorded in August. Retail sales growth has been relatively steady all year but is well below the pace reported over the previous five years. Sales rose 0.85 percent in September on the previous month, little changed from an increase of 0.87 percent in August (revised from 0.83 percent). In year-to-date terms, sales growth rose from 10.3 percent in August to 10.4 in September.

The increase in headline growth reflected a similar increase in consumer spending in urban areas, with year-on-year growth picking up from 10.6 percent in August to 10.7 percent in September. This is the strongest growth rate since the 10.9 percent recorded last December. Sales growth in rural areas also rose by a similar amount from 10.9 percent in August to 11.0 percent in September.

Auto sales grew by 13.1 percent year-on-year in September, unchanged from the growth rate recorded in August, and consistent with other data showing recent strong gains in the volume of cars sold. This partly reflects a tax break aimed at boosting auto demand as well as the base effect of weakness twelve months earlier, when a sharp sell-off in the Chinese stock market undermined demand for big-ticket consumer items. Sales growth also picked up for home appliances and household non-durables in September, offsetting weaker sales growth for communications equipment and furniture.

Retail Sales measure goods that are sold to the consumer or end-user, generally in small quantities and in the state in which they were purchased by the retailer. China's retail sales are reported monthly. The critical value is the change from the same month in the previous year.

Retail sales tend to have a muted impact because the Chinese economy is not heavily reliant on consumer spending. However, the government is trying to stimulate consumer spending to give the economy more balance. To this end, the government put into place a basket of stimulus measures, including government subsidies and tax breaks for home appliances and cars, to expand consumption to sustain the economic growth, which was slowed by a slump in exports amid the global economic downturn.