Goldman Sachs Spots Ominous Economic Signal Brewing in China, Creating Headwinds for 2025 Growth: Report

The financial giant Goldman Sachs is reportedly issuing a warning after spotting an ominous economic metric in China.

A new tracker from Goldman economists indicates wages in China grew by only 3.9% from the second quarter of 2024, the lowest growth in Chinese recorded history, excluding the pandemic years, Bloomberg reports.

The Goldman economists also note that the figure is roughly a percentage point less than official Chinese government statistics.

“Our wage tracker suggests that sluggish wage growth may impose headwinds to consumption growth in the second half of 2025. We anticipate incremental and targeted easing measures in the second half of the year to alleviate labor market pressures.”

Ernan Cui, a China consumer analyst at the investment research firm Gavekal, says in a report reviewed by Bloomberg that Chinese workers are shifting toward self-employment because there are few available formal jobs in the country’s labor force.

Cui also reportedly says that the Chinese government’s statistics bureau is counting those self-employed workers, but she notes that they may not be counted in surveys of large companies.

“The data indicate that China’s labor market has been consistently weak, despite a broadly stable headline unemployment rate. Until the labor market truly tightens, it seems unlikely that household confidence will rebound.”

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