A People’s Bank of China (PBOC) second-quarter index of employment confidence hit its lowest level since the global financial crisis of 2008, as Covid lockdowns take their toll on the economy.
Nearly 46% of Chinese households said they think employment prospects remain “grim” in the second quarter, relying on questions asked of PBOC urban depositors.
Another indicator of future expectation of employment also dropped to the worst level since 2009.
The jobless rate in 31 big cities rose to a record 6.9% in May, according to surveys, prompting Premier Li Keqiang to insist China will strive to return the economy to normal and cut the jobless rate, state media said.
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A cohort of graduates larger than the entire population of Portugal is about to enter one of China’s worst job markets in decades, at a time when youth unemployment stands at a record 18.4%.
Faced with economic uncertainties, more than 58.3% of households said they are inclined to save rather than spend or invest in the second quarter, up from 42.4% in the first quarter, the PBOC survey showed.
Despite signs of economic recovery in May from the previous month’s slump, consumption stayed weak, underlining the challenge of attaining positive GDP growth.
A separate survey of bankers the PBOC published also showed weaker loan demand in the current quarter.
An index of loan demand dropped to 56.6%, the lowest since the third quarter of 2016, with declines in manufacturing, infrastructure, retail sales and property.
As lockdowns shut businesses, an index of entrepreneurs’ confidence in the economy dropped 9.2 percentage points for the second quarter from the previous quarter, and was down 15.5 percentage points on the year.
- Reuters, with editing by Neal McGrath