China's economy lost further momentum in July as retail sales rose just 0.6% year on year, industrial output slowed to 4.5%, fixed-asset investment contracted 6.7% in the first seven months, and the urban unemployment rate edged up to 5.2%. The softer data, released later than usual by the National Bureau of Statistics, highlighted persistent weakness in domestic demand, a deeper investment pullback and a fragile labor market after second-quarter growth slowed to 4.3%. Extreme weather, including three typhoons that disrupted manufacturing hubs and ports, likely weighed on factory activity, while the official manufacturing purchasing managers' index slipped into contraction in July for the first time since February. Policymakers have leaned on trade-in subsidies to support purchases of autos and home appliances, but analysts at Citi said subsidy distribution slowed again in July, with daily average sales falling to 6.3 billion yuan from 9 billion yuan in June. Goldman Sachs said the program may also have pulled demand forward, leaving retail momentum weaker in the second half. The contrast between soft domestic activity and strong external demand remained stark. Exports jumped 23.9% in July after a 27% rise in June, imports climbed 27.5%, and the trade surplus reached $687.4 billion in January through July, keeping China on course for a full-year surplus above $1 trillion for a second straight year. Goldman Sachs economists Kamakshya Trivedi and Hui Shan said China should combine stronger fiscal spending with gradual yuan appreciation, which they estimate is about 20% undervalued, to support internal demand and reduce external imbalances. Credit data added to concern. New bank loans in July posted their biggest monthly drop on record by Barclays's calculations, while household loans including mortgages shrank again as the property downturn and weak labor market weighed on borrowing. A private survey led by Tsinghua University professor Li Daokui put China's broad unemployment rate at 10.2% in July, far above the official figure, and found more than half of roughly 24 million long-term unemployed were aged 16 to 24. Li called the investment contraction "unprecedented" and urged government borrowing to rise to more than double this year's planned 12 trillion yuan in new debt issuance.