EddieJayonCrypto
22 Jul 25
Goldman Sachs warns that China's wage growth slowed to 3.9% in Q2 2024, the lowest outside pandemic years and below official figures. This slow wage growth may hinder consumption growth in late 2025, prompting expectations for targeted easing to relieve labor market pressures. Analyst Ernan Cui note...
Goldman Sachs has issued a warning after identifying a concerning economic signal in China. Their new wage tracker reveals that wages grew by only 3.9% in the second quarter of 2024, marking the lowest growth in recorded Chinese history outside of pandemic years. This figure is approximately one percentage point lower than the official statistics released by the Chinese government.
Goldman economists caution that this sluggish wage growth could create obstacles for consumption growth in the latter half of 2025. They predict incremental and targeted easing measures will be necessary to ease labor market pressures during this period.
Adding further insight, Ernan Cui, a China consumer analyst with Gavekal, points out that many Chinese workers are gravitating towards self-employment due to limited formal job opportunities. Although the government includes self-employed individuals in labor force statistics, these workers may be underrepresented in surveys focusing on large companies.
Cui emphasizes that despite stable headline unemployment rates, China’s labor market remains persistently weak. She suggests that without a genuine tightening of the labor market, household confidence is unlikely to experience a significant rebound, posing broader challenges for economic recovery and growth.