To Understand China’s Labor Market, Look Beyond the Headline Unemployment Rate

The surveyed jobless rate fell to 5% in September, painting a promising picture, but the indicator needs to be complemented with other data to gain a comprehensive view of the labor market

According to data from the National Bureau of Statistics (NBS), China’s surveyed urban unemployment rate was 5% in September — a significant improvement from last year’s peak of 6.1% in April and the 5.7% recorded late last year. The job market appears to have rebounded, surpassing even the levels in late 2019 and most of that year.

By this gauge alone, it would seem that China’s employment has fully recovered to pre-pandemic levels.

But this contradicts how people are feeling right now about the job market. What’s compounding the confusion is that the consumer price index inflation rate is hovering around zero, the producer price index (PPI) is showing deflation, and the GDP deflator has remained nearly -1% for two consecutive quarters. For context, the GDP deflator for the whole of 2019 stood at 1.2%.