China Consumer Dashboard 2026Q2

• Consumption momentum softened sequentially: According to the NBS quarterly household survey, household disposable income per capita rose 5.6% yoy in Q2 (5.2% qoq annualized) in nominal terms, up from 4.9% yoy in Q1, though sequential growth was slightly softer than Q1’s 5.4% qoq annualized pace. Household nominal consumption growth increased modestly to 3.8% yoy in Q2 from 3.6% in Q1. On a seasonally adjusted sequential basis, nominal household consumption per capita grew 4.0% qoq annualized in Q2, compared with 4.5% in Q1. The slowdown in sequential consumption growth was mainly driven by weaker spending on food, partly offset by stronger growth in education/culture/entertainment consumption. Retail sales growth slowed sharply to 0.2% yoy in Q2 from 2.4% yoy in Q1, partly reflecting a higher base and adverse weather conditions.
• The labor market showed mixed but broadly stable conditions: After seasonal adjustment, the official urban surveyed unemployment rate declined from 5.3% in March to 5.1% in June. The weighted average of employment sub-indexes across PMI surveys also rose in Q2 from Q1, albeit remaining below historical averages. Wage indicators were mixed. Official wage income growth picked up to 5.2% yoy in Q2 from 4.2% in Q1, and the labor cost sub-index in the Cheung Kong Graduate School of Business (CKGSB) Business Condition Index (BCI) survey pointed to faster wage growth. However, migrant workers’ average monthly income growth edged down to 3.0% yoy in Q2 from 3.2% in Q1. Taken together, our revamped wage tracker suggests urban wage growth rose to 4.7% yoy in Q2, from 4.3% yoy in Q1. Note that this stands in contrast to the more downbeat sentiment regarding the labor market and increased concerns over AI displacement of jobs observed among onshore investors during our recent marketing trips.
• Household savings rate ticked up: After seasonal adjustment, the household savings rate rose modestly to 32.6% in Q2 from 32.3% in Q1, slightly above its pre-Covid trend-implied level. Our estimated “household excess deposits”—the gap between actual household bank deposits and their pre-Covid trend—increased to RMB 61 trillion in Q2. While household bank deposits continued to grow, cumulative increases in household bank deposits moderated from 10.0% of GDP in Q1 to 8.8% in Q2 on a four-quarter rolling basis.
• Stable household assets, continued deleveraging: To assess how household assets and liabilities have evolved through the property downturn, we constructed a quarterly household balance sheet tracker. The tracker suggests total household assets have plateaued at around RMB730tn in recent quarters (2026Q1 the latest reading). The key shift is that household asset growth is now rotating away from housing toward financial assets. On the liability side, our tracker shows household leverage has started to drift lower since mid-2024, primarily reflecting a decline in outstanding mortgage balances and short-term consumer loans.
• Official consumer confidence softened: After seasonal adjustment, the NBS consumer confidence index slipped modestly in April-May (latest available), versus Q1. Given the lag in NBS releases, we also monitor Morning Consult’s daily consumer sentiment surveys, which offer a timelier and more granular read on household sentiment, though with a bias toward higher-income groups¹. These surveys point to an improvement in consumer confidence in Q2 vs. Q1, with the increase broad-based across age and income groups.
• Others: In mid-July, China’s State Council approved the “15th Five-Year Plan for Expanding Consumption,” underscoring consumption as a medium-term policy priority amid softer retail sales. In our view, the measures are largely medium-term and supply-side oriented, suggesting limited near-term support given weak labor-market conditions, subdued income expectations, and ongoing negative property wealth effects.

1 The NBS consumer confidence index is based on a monthly telephone survey of more than 6,000 urban and rural consumers across 15 provinces. By contrast, Morning Consult’s China survey targets the internet population, which tends to be higher-income and more optimistic.