China's jobless rate falls to 5.0% as H1 average holds at 5.2%

China's surveyed urban unemployment rate improved to 5.0% in June, the lowest reading this year, though the half-year average of 5.2% underscores a still-fragile labor market recovery.

China's surveyed urban unemployment rate fell to 5.0% in June from 5.1% in May, the National Bureau of Statistics said Wednesday, as the H1 average held at 5.2% during an uneven economic recovery.

"The employment situation remained generally stable in the first half of the year," the NBS said in its statement, noting that the jobless rate in 31 major cities also declined 0.1 percentage point to 5.0%.

The June reading matched the rate in 31 major cities, which also fell 0.1 percentage point month over month. Local registered labor unemployment stood at 5.0%, while non-local registered labor came in at 4.9% and non-local agricultural registered labor at 4.8%. Average weekly working hours for enterprise employees held at 48.2 hours. The rural migrant workforce totaled 192.27 million at the end of the second quarter, up 0.5% from a year earlier.

The improvement in the jobless rate offers a bright spot in an otherwise mixed economic picture. China's GDP expanded 4.7% in the first half from a year earlier, slowing from 5.0% in the first quarter, with the second quarter growing just 4.3%. The NBS acknowledged "prominent contradictions between strong supply and weak demand," saying the recovery's foundation still needs consolidation. Industrial production rose 5.3% in June, beating the 4.6% consensus estimate, while retail sales edged up 1.0% — a modest improvement from May's 0.6% decline but still reflecting tepid consumer demand.

The labor market data aligns with broader trends showing a gradual, two-speed recovery. The H1 average unemployment rate of 5.2% compares with the government's annual target of around 5.5%, leaving some policy room. Urban residents' per capita disposable income grew 4.4% nominally in H1, while rural incomes rose 6.4%, narrowing the urban-rural income ratio to 2.37 from 2.42 a year earlier. Fixed asset investment excluding rural households fell 5.7% year over year in the first half, with real estate development investment dropping 18.0%, underscoring the property sector's drag on the broader economy.

The NBS's acknowledgment of "many external factors of instability and uncertainty" points to headwinds ahead. The agency said it will intensify counter-cyclical and cross-cyclical adjustments, continue expanding domestic demand, and accelerate efforts to cultivate new growth drivers. For the labor market, the key question is whether the June improvement can sustain into the second half, particularly as the property sector remains under pressure — new home sales by floor area dropped 11.6% in H1, and sales value fell 13.6%. The improving employment picture may provide some support for consumer confidence and domestic demand, though the H1 average of 5.2% suggests the recovery remains gradual.

This article is for informational purposes only and does not constitute investment advice.