China's Economy Slows Further in August as Key Data Lag Forecasts

Beijing: China's economy continued to slow in August as data on retail sales, industrial production, and investment all missed forecasts, reflecting lingering weakness in domestic demand and the drag from industrial overcapacity curbs.

Retail sales increased 3.4 percent from last year, below expectations of 3.9 percent and easing from July's 3.7 percent. Industrial production grew 5.2 percent, the lowest since August 2024, down from 5.7 percent in July. Fixed-asset investment increased only 0.5 percent during the first eight months of the year, significantly lower than the 1.6 percent rate previously, with real estate investment dropping 12.9 percent.

The urban unemployment rate based on surveys increased to 5.3 percent, partly due to the graduation period. Service consumption maintained some strength, driven by leisure, tourism, and transport, but overall consumption was patchy. Sales of jewelry, sports equipment, and furniture recorded double-digit growth, but petroleum, tobacco, and liquor trailed behind.

The National Bureau of Statistics issued a warning of "multiple risks and challenges" in the external environment and vowed to stabilize employment, business, and market expectations. Economists believe that Beijing could take marginally more accommodative fiscal policies, though a major stimulus is unlikely unless growth could potentially miss the official five percent target.