Unexpectedly weak economy
China’s youth unemployment rises to record high
06/15/2023, 5:14 am
Analysts did not expect this: the corona pandemic is still deep in China’s bones. The economy grew by just 3.6 percent in May. Problematic: the youth cannot find work.
Youth unemployment in China hit a new record high of 20.8 percent in May. This meant that every fifth young person was unemployed, as the National Statistics Office officially announced on Thursday. In April, unemployment in this age group was 20.4 percent. The quota takes into account 16-24 year olds in urban areas. It has continued to rise over the past few months.
Relative to the entire employable population, the unemployment rate remained constant at 5.2 percent compared to April. In China, the unemployment rate does not give a full picture of the situation as it is only calculated for urban areas.
“Economic momentum is slowing down”
Industrial production in the world’s second largest economy rose 3.5 percent year-on-year last month, data from the National Statistics Office showed. However, the expansion in May marked the slowest growth since February. Analysts polled by Reuters had expected production growth to slow to 3.6 percent, down from 5.6 percent in April.
Retail sales, a key indicator of consumption, rose 12.7 percent year-on-year in May, according to the data, slowing from the 18.4 percent increase in April. Analysts had expected an increase of 13.6 percent. “All the data consistently indicates that economic momentum is slowing down,” said Zhiwei Zhang, president of Pinpoint Asset Management, on Thursday.
Weakening domestic and international demand is increasing pressure on policymakers to continue bolstering the uneven post-pandemic economic recovery. Analysts said last month’s data could be severely skewed by comparisons to last year’s very poor performance, when many cities suffered from tight coronavirus lockdowns. However, the economic recovery from the first quarter has lost significant momentum, prompting the central bank to cut some interest rates this week.