CHINA RETAIL SALES WEAKEN ALARMINGLY
China retail sales rose 17% YoY in July. Nominal growth has been supported by rising inflation but real sales have been slowing down alarmingly since 2009. Real retail sales rose 10.4% YoY in August, the weakest growth rate since 2004!
Obviously, China’s domestic economic is not offsetting the export slowdown, increasing the risk that China’s inflation fight strangles the economy more than needed. The optimistic view is that weak domestic demand will soon compel Beijing to re-stimulate. August CPI is encouraging in this regard but confirmation that inflation is under control is several months away.
Interestingly, jewelry sales have been soaring in China!