China’s Consumer Boom Seen Temporary as Weak Sentiment Persists

China’s unexpectedly strong retail sales in May gave the economy some relief from US tariffs, although the momentum may not last as deflationary forces persist and a housing market slump shows signs of deepening.

Retail sales grew 6.4% last month, the fastest pace since December 2023 and exceeding all estimates. That contrasted with a mild slowdown in industrial output and fixed-asset investment, as Donald Trump’s tariffs hurt overseas demand.