China's Youth Unemployment Rate Hits Highest Level Since Last December - What Does This Mean for Investors?
As the statistics bureau in China reported a rise in the youth jobless rate for August, reaching the highest level since December, investors and policymakers are feeling the pressure. The unemployment rate for 16-to-24-year-olds, excluding college students, climbed to 18.8% last month, up from 17.1% in July.
This increase in youth unemployment is just one of several economic indicators showing a slowdown in economic growth momentum for China in August. With the country at risk of missing its annual growth target of around 5%, investors are closely watching the situation.
China began publishing the youth unemployment ratio again last December, after excluding college students from the survey pool. The highest level before this revision was 21.3% in June of the previous year. Additionally, the unemployment rate for 25-to-29-year-olds rose to 6.9% in August from 6.5% in the previous month.
Rising unemployment in China has forced some college graduates to accept low-paid work or rely on their parents' pensions, according to reports. This trend is also affecting white-collar workers, particularly in the finance industry, who are facing pay cuts that could further dampen domestic consumption.
The nationwide survey-based jobless rate in China increased to 5.3% in August from 5.2% in July, with the statistics bureau attributing this rise to the graduate season. Official data shows that China has a record high of 11.79 million college graduates this year.
In conclusion, the rising youth unemployment rate in China is a concerning trend for investors, as it could impact the country's economic growth and consumer spending. Policymakers will need to take action to address this issue and prevent further negative consequences for the economy.