China’s retail sales fell for the first time in more than three years in May while urban investment contracted more than expected, piling pressure on Beijing to roll out meaningful stimulus to spur consumption, even as de-escalation in Middle East tensions offers some near-term relief. Retail sales, a gauge of consumption, declined in May for the first time since December 2022, dropping 0.6% from a year earlier, according to the National Bureau of Statistics on Tuesday. The Labor Day holiday at the start of May failed to offset sluggish consumer spending, with Beijing scaling back trade-in subsidies earlier this year. The sales contraction was a surprise as economists polled by Reuters had estimated flat growth. Fu Linghui, the bureau’s spokesperson, highlighted retail sales in goods and services combined eked out a 2.8% jump over the five months.

Full report : China’s Consumer Spending Falls for First Time Since Covid as economy weakens further.