Retail Sales Contrast in US and China

15 May 2008

WASHINGTON DC: There's a chink of light at the end of the US recessionary tunnel, with figures that show the nation's retail sales slipped less than expected last month.

The Commerce Department reports April sales dipped by 0.2%, compared with a 0.2% rise the previous month.

But analysts had been forecasting a greater slide, giving hope that the Federal Reserve's interest rate slashing policy is having the desired effect on shoppers and that growth may have increased a little during the first half of the year.

US businesses, however, increased their inventories by just 0.1% in March, less than expected, as they prepared for a cut in demand from consumers and other firms.

In China, on the other hand, shoppers are continuing their spending spree. April data from the National Bureau of Statistics show retail sales soared by 22% and inflation rose to 8.5% in April - near to a twelve-year high.

The Chinese authorities hope that stronger domestic demand will offset a slowdown in exports as the economic downturn elsewhere takes hold.

The rise in Chinese spending has been fuelled by improvements in minimum wages, expanding health care and policies designed to boost consumption in rural areas.

The figures show home appliances and furniture sales picked up, while less was spent on grains, cooking oil and meat.

Data sourced from BBC Online; additional content by WARC staff