Core Viewpoint - The article indicates that the U.S. economy is showing signs of a downward trend, but the probability of a significant downturn is low. Key indicators across employment, inventory, investment, consumption, and financial conditions suggest a weakening economic structure [2]. Group 1: Employment Market - The employment market is experiencing structural weakening, with a significant cooling in supply-demand relationships. Job openings are at 4.4%, below the 12th percentile since 2018, indicating weaker labor demand compared to pre-pandemic levels [5][20]. - Labor supply is also weak, with a participation rate of 62.4%, which is below the 38th percentile since 2018. The labor market's supply-demand gap is at 1.0, indicating a significant cooling [21]. - Leading indicators suggest a downward trend in the employment market, with rising unemployment claims pointing towards an increase in the unemployment rate [23]. Group 2: Inventory - The U.S. is currently in a weak inventory replenishment cycle, with inventory growth turning positive in 2024 but at a low rate. The manufacturing PMI has been fluctuating around 50, indicating alternating active and passive replenishment [6][27]. - Three leading indicators suggest a low probability of large-scale inventory replenishment in the near future, with the manufacturing PMI indicating weak inventory investment [30]. Group 3: Private Sector Investment - Non-residential investment is expected to continue declining in the next six months, with leading indicators such as manufacturing PMI and new orders showing weakness [7][34]. - In the real estate sector, weak demand, high inventory, and elevated financing costs are expected to hinder improvement in real estate investment [39]. Group 4: Consumer Spending - Consumer income growth is slowing, with disposable income growth recorded at 4.2% in Q1 2025, below the historical average of 5.2% [10][58]. - The wealth effect is diminishing, with a significant drop in excess wealth from $14.9 trillion to $11.1 trillion, a decrease of 26% [65]. - Despite reduced consumer spending capacity, the health of household balance sheets remains strong, with low leverage and manageable interest payment burdens [73]. Group 5: Financial Conditions - Financial conditions are currently in a loose state, with the Bloomberg Financial Conditions Index turning positive again after a tightening period due to tariff policies [78]. - The Chicago Fed's National Financial Conditions Index also indicates a loose financial environment, remaining at the 42nd percentile since 2018 [80].

Core Viewpoint - The article discusses the current economic situation in China, highlighting the mixed performance of consumption, industrial production, and investment, indicating a potential lack of sustainability in the recent economic recovery [7]. Consumption - In May 2025, retail sales showed a cumulative year-on-year growth rate of 5.0%, up 0.3 percentage points from April, driven by government subsidies and increased consumer travel [7][18]. - The demand for gold and jewelry has increased due to rising gold prices, but this consumption is not stable and may not be sustainable if income does not improve [7]. - The overall consumer sentiment is cautious, with a preference for using savings over loans for consumption, reflecting a weak growth in new short-term loans [7]. Industrial Production - The cumulative year-on-year growth rate of industrial added value in May 2025 was 6.3%, a decrease of 0.1 percentage points from April, indicating a slowdown in industrial production [7]. - The Consumer Price Index (CPI) remained in negative territory at -0.1%, suggesting ongoing deflationary pressures [7]. Investment - Fixed asset investment showed a cumulative year-on-year growth rate of 3.7% in May 2025, down 0.3 percentage points from April, with real estate investment declining by 10.7% [7]. - Infrastructure investment grew by 10.42%, but this was also a decline of 0.43 percentage points from the previous period, indicating a weakening trend across various sectors [7]. - The article emphasizes that the real estate sector requires additional policy support to stabilize [7]. Market Outlook - The bond market is expected to remain in a favorable position due to a loose monetary policy and weak real financing, with a recommendation to maintain duration and wait for positive developments [7]. - The recent strong performance in credit bonds is attributed more to expectations rather than actual capital movement from deposits to non-banking sectors [7].

Employment Market - The employment market is showing structural weakness, with a significant cooling in supply-demand relationships. The job vacancy rate is currently at 4.4%, which is at the 12th percentile since 2018, slightly below the 4.5% average from 2018-2019[3] - The labor force participation rate is at 62.4%, at the 38th percentile since 2018, indicating weaker labor supply compared to pre-pandemic levels[3] - The ratio of job vacancies to unemployment (V/U) is currently at 1.0, at the 6th percentile since 2018, reflecting a significant cooling in labor market supply-demand relationships[3] Inventory and Investment - The U.S. is currently in a weak inventory replenishment cycle, with inventory year-on-year growth turning positive in 2024 but at a weak pace[5] - Leading indicators suggest that non-residential investment may continue to decline in the next six months, as manufacturing PMI and new orders are both weak[6] - The probability of large-scale inventory replenishment by businesses in the U.S. is low, as indicated by three leading indicators: manufacturing PMI, OECD leading indicators, and the self-inventory to customer inventory ratio[8] Consumer Spending - Consumer spending capacity is weakening, with disposable income growth slowing to 4.2% in Q1 2025, below the 5.2% average from 2018-2019[10] - The wealth effect has diminished significantly, with excess wealth dropping from $14.9 trillion in Q4 2024 to $11.1 trillion in Q1 2025, a decline of 26%[10] - Despite reduced spending capacity, the risk of consumer liquidity issues is low due to healthy household balance sheets and low interest payment pressures[11] Financial Conditions - Financial conditions are currently in a loose state, as indicated by the Bloomberg Financial Conditions Index and the Chicago Fed National Financial Conditions Index (NFCI)[12] - Recent fluctuations in financial conditions were influenced by tariff policies, but conditions have returned to a more accommodative stance since early May 2025[12]

Core Viewpoint - The household deposits in RMB have reached approximately 160 trillion yuan, reflecting a significant increase over the past eight years, despite recent fluctuations in monthly data [1][2][4]. Group 1: Household Deposits - As of April 2025, household deposits in RMB reached 159.08 trillion yuan, with an increase of 7.83 trillion yuan in the first four months of the year [1][2]. - The household deposit scale has increased by nearly 100 trillion yuan from 59.78 trillion yuan in 2016, with the proportion of household deposits in total RMB deposits rising from 39.7% in 2016 to 50.9% in the first quarter of 2025 [2][4]. - In April 2025, household deposits decreased by 1.39 trillion yuan, which is consistent with seasonal fluctuations observed in previous years [2][4]. Group 2: Trends in Savings and Consumption - The trend shows a gradual increase in the proportion of residents preferring to save, with 61.4% indicating a preference for more savings in the latest survey, although this is a slight decrease from the previous quarter [5]. - The inclination towards increased consumption has risen to 24.9%, reflecting a growing willingness to spend, particularly in areas such as education, healthcare, and tourism [5][6]. - The overall consumption growth is expected to improve, supported by policy measures aimed at enhancing consumer spending and adapting to a domestic demand-driven growth model [6]. Group 3: Monetary Policy and Economic Outlook - The central bank plans to implement moderately loose monetary policies to support consumption and stabilize economic growth, focusing on various consumer sectors [6]. - The shift towards a consumption-driven economy is seen as crucial for national economic growth, especially in light of weakening external demand due to global trade tensions [6].