CN: Retail Sales

Thu Jan 18 01:00:00 CST 2018

Consensus Actual Previous Revised
Y/Y % Change 10.2% 9.4% 10.2%
M/M % Change 0.7% 0.83% 0.81%

Chinese retail sales grew 9.4 percent on the year in December, slowing from 10.2 percent in November and falling short of the consensus forecast of 10.2 percent. This is the weakest year-on-year increase in retail sales since the series was initiated, though appears to reflect in part a reaction to very strong growth in mobile phone sales in November. Retail sales rose 0.70 percent on the month in December after an increase of 0.81 percent in November.

The sharp fall in headline retail sales growth in December was largely driven by communication equipment, sales of which grew by 13.4 percent on the year after surging 33.9 percent in November in response to the release of a new model of mobile phone. Sales growth also weakened for automobiles, household non-durables, and cosmetics, partly offset by stronger growth in sales of home appliances, clothing, furniture, and oil and oil products.

Year-on-year growth in urban retail sales dropped from 9.9 percent in November to 9.1 percent in December, while rural retail sales growth slowed from 11.7 percent to 10.1 percent.

Despite a weaker year-on-year increase in December, annual growth in retail sales picked up strongly in 2017 to 10.2 percent, compared with growth of 6.9 percent in 2016.

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.