In May, the year-on-year retail sales growth rate turned negative for the first time since the pandemic; services and goods consumption are increasingly diverging (includes video)

【Caixin】 In May 2026, the pullback in the push for consumer goods “trade-in for new ones” and the continued impact of prior overspending effects remained visible. Combined with a drop in international gold prices and ongoing weakness in the real estate sector affecting related consumption, growth in goods consumption slowed for the second consecutive month, widening the gap with service consumption growth.

Data released by the National Bureau of Statistics on June 16 showed that in May, total retail sales of consumer goods fell by 0.6% year-on-year, with the growth rate 0.8 percentage points lower than the previous month. This was the first time since 2023 that growth turned negative. Among them, excluding automobiles, the retail sales growth rate declined by 0.7 percentage points year-on-year to 1.1%.

Looking at the trend more clearly via seasonally adjusted month-on-month figures, in May total retail sales of consumer goods fell by 0.38%. It was negative for three consecutive months, with the contraction narrowing by 0.17 percentage points, indicating that after the Spring Festival holiday, consumption growth continued to lack momentum.