China's overall consumer spending growth nearly stopped in April, with urban retail sales actually shrinking. This means larger retailers saw sales decline, while online shopping continued to grow slowly.
Why it matters
Chinese consumers are not returning to their old spending habits, especially for big purchases. This means manufacturers of cars, home appliances, and jewelry face a shrinking market. The data suggests a long-term shift in consumer behavior, away from discretionary spending and towards more cautious habits.
The signal
Watch whether the next few months show a rebound in urban spending, or if the declines in big-ticket items continue to deepen.