PBOC finds consumer mood is turning darker even as economy grows

Chinese households became more pessimistic last quarter and their view of the jobs market fell to the worst ever, according to a survey by the central bank, a worry for an economy that risks a slowdown ahead after growing faster than the government’s target for much of this year. Consumers turned increasingly negative about income, employment, and prices in April-June, the poll showed. The release of the survey results has become unpredictable in recent years, with the data for the first and second quarters published at the same time on Friday instead of at a regular interval as in the past. Record employment fears signal vulnerability The figures throw a spotlight on a worsening vulnerability for China, whose economy powered through U.S. President Donald Trump’s trade war, largely on the strength of its exports. The data also revealed that people’s willingness to consume dropped to the weakest since the outbreak of the pandemic, with almost two-thirds of respondents saying they want to save more, while an employment index fell to a record low. “The latest data paint a downbeat picture,” Goldman Sachs Group economists led by Yuting Yang said in a note. Deepening household pessimism about income and employment likely means that faster retail sales growth since late last year was mostly thanks to government subsidies, instead of improving consumer sentiment. It underlines the challenge for Chinese policymakers to prop up consumption in a sustainable way in the absence of an improvement in the labor market. Consumer spending growth drops to pandemic-era levels Retail sales grew 5% in the first half of the year, an improvement from 2024 but still weak compared with an 8.2% expansion in the same period before the pandemic in 2019. That drop in demand has created an oversupply of many goods, pushing prices down. The data also showed a shrinking percentage of respondents expecting consumer and housing prices to rise. It’s an outlook that spells more trouble for the property sector, which has seen home prices falling since 2022 and continues to erode people’s wealth as the value of their assets drops. Loan demand from companies of all sizes fell in the second quarter from the first three months of the year, according to a separate survey of banks, with the indicator of overall loan appetite dropping by more than 16 points to the weakest level since at least 2009. The GDP deflator — a broad measure of prices across the economy — declined for the ninth consecutive quarter, extending the longest streak since the quarterly data began in 1993. Little relief appears in sight, with the price expectation index falling again in the second quarter. The PBOC surveyed 20,000 bank depositors in 50 cities across the country, about 3,200 banks and over 5,000 companies for the surveys. Read more: What the rise of China’s singles economy means for brands Fashion recession indicators: China vs. Western styles Inside China’s booming $83B pet market

PBOC finds consumer mood is turning darker even as economy grows

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Published July 29, 2025

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PBOC finds consumer mood is turning darker even as economy grows