Youth jobless data freeze

China has suspended publishing data on its soaring youth unemployment rate to iron out complexities in the numbers, fanning investor fears about data transparency in the world's second-largest economy, as the overall urban jobless rate inched up 0.1 percentage point to 5.3 percent in July.

The National Bureau of Statistics did not release a jobless figure for people aged between 16 and 24 in its July report yesterday after youth unemployment hit a record 21.3 percent in June. The bureau last month indicated the rate may increase.

Bureau spokesman Fu Linghui said the labor statistics need "further optimization" as more research needs to be done on "whether students looking for a job before graduation should be counted in the labor statistics."

Economists said the omission of the youth unemployment data suggests officials are concerned about negative sentiment spreading through the country.

"Authorities clearly recognize this is a confidence crisis, and are trying to ensure the messaging is not overly bearish," said Louise Loo, an economist at Oxford Economics.

Loo added it was almost certain that if it had been published, the youth unemployment rate would have edged higher again to only possibly peak in October.

Youth unemployment has surged since last year, a sign of a weakening economy as employers pull back on hiring.

Summer usually sees a higher youth jobless rate as tens of millions of graduates hit the labor market. The government had previously said almost 12 million students from universities and colleges would graduate in 2023.

Gary Ng, senior economist at Natixis, said omitting some of the job data would make it harder to understand China's youth employment landscape, which is an "important" indicator for the nation's economy.

"Still, if the discontinuation is to improve the statistical methodology," the damage to investor confidence would depend on "whether the new data series can provide a better picture," he added.

China has over the past year limited access to corporate data, court documents and academic journals and raided professional networks serving businesses, hampering investors' ability to assess the economy.

Officials have also sought to play down economic risks like deflation, with some Chinese-based analysts saying they were instructed by regulators and their companies not to discuss the matter publicly.

Meanwhile, the NBS data showed that industrial output grew 3.7 percent last month from a year earlier, slower than an estimated growth of 4.4 percent that was also the pace seen in June.

Retail sales rose by 2.5 percent, down from a 3.1 percent increase in June, and missed analysts' forecasts of 4.5 percent growth despite the summer travel season. It was also the slowest growth since December 2022.

Barclays cut its forecast for China's 2023 economic growth to 4.5 percent from 5.3 percent due to a faster-than-expected deterioration in the housing market. Officials have set this year's expansion guidance at 5 percent.

Central bank adviser Cai Fang said it is "urgent" to stimulate household consumption and use all reasonable, lawful and economic channels to put money in residents' pockets.

Editorial: Quite a job working out statistics