Themis Qi and Reuters
China overall unemployment rate remained unchanged at 5 percent in May, as retail sales beat market estimates in a bit of good news for the economy.
However, the mainland’s property investment slump worsened.
The jobless rate was the same compared with April but down by 0.2 percentage points from a year ago, data from the National Bureau of Statistics showed.
For the first five months of the year, the unemployed population accounted for 5.1 percent on average of the total labor force, down by 0.3 percentage points from a year ago.
Meanwhile, retail sales in May rose 3.7 percent year-on-year last month, hitting a three-month high due to May Day and Dragon Boat Festival holidays during the month.
The growth in May was also faster than April’s 2.3 percent growth, beating market estimates.
NBS spokesperson Liu Aihua said China’s increasingly strong economic recovery is helping stabilize employment.
However, Liu cautioned that there are still several challenges as the labor market is huge and faces structural conflicts.
Other May data revealed weaker-than-expected industrial output and a weakening real estate market.
Factory output in May grew only 5.6 percent, dragging industrial output expansion down to 6.2 percent for the first five months of the year.
And property investment fell 10.1 percent in the first five months of 2024 from a year earlier, after dropping 9.8 percent in January-April, even as policymakers doubled down on efforts to support the ailing sector and shore up consumer confidence.
Also, the gross floor area of new projects that started construction contracted by 24.2 percent.
Property sales by floor area in January-May fell 20.3 percent from a year earlier, compared with a 20.2 percent slump in January-April while sales volume slid by 20.3 percent and by 27.9 percent.
Liu said that Beijing’s supportive policies still need time to be effective, after a historic 300 billion yuan (HK$322.9 billion) housing rescue plan was announced in late May.
She said that the decline in new home sales and new constructions has narrowed.
Commenting on the mixed data, ING economist Hugo Lin said there’s a higher possibility that the People’s Bank of China will cut rates in the coming months to support the economy, after the central bank held a key one-year rate unchanged yesterday.
Goldman Sachs also anticipates that the PBOC will cut the reserve requirement ratio by 25 basis points in the third quarter and the policy rate by 10 bps in the fourth quarter.