Rory Green, economist at TS Lombard:
• Auto sales have been a weak spot. Though a popular gauge of consumption trends in the past, Green says the data have been muddied by factors beyond trade uncertainty - including new emission standards in China, tighter restrictions on buying cars in the biggest cities, and a growing used-car market—so auto sales may not be the best gauge.
• Disposable income is a better gauge. While confidence is weak, Green says disposable income is growing reasonably well, helped by wage growth and income tax cuts.
• Green says a savings survey from the People’s Bank of China is a more reliable indicator of consumer confidence than official stats, which show an increase in confidence despite the trade war. The PBOC survey though shows confidence has slipped while a perceived need for saving has risen. But consumer credit has been rising, which could help Chinese consumers feel more flush.
• Green says stimulus measures will help consumption and retail sales growth stabilize, but he doesn’t expect consumption to offer a major boost to growth this year.
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