Jobs figures are gaining increasing attention as top leaders downplay the country’s GDP growth target of “around 5.5 percent,” in favor of attaching greater significance to stability in employment and prices.
China’s unemployment rate likely remained heightened in July, with economists expecting the surveyed jobless rate to stay unchanged at 5.5 percent. That’s theInvestors should also be looking under the hood for signs of any improvement in the jobs rates for the most vulnerable groups. Summer months usually see a seasonal spike in unemployment as graduates enter the job market.
The pressure is especially great this year with the number of students graduating hitting a record 10.76 million. The frequent Covid outbreaks also bode ill for migrant workers, as authorities might shut down construction sites and restaurants once there’s a flareup.The People’s Bank of China will have an opportunity to drain funds from the banking system through policy loan operations on Monday, which would help rein in risks created by excessive liquidity.
Eight out of 12 analysts polled by Bloomberg forecast the PBOC will roll over only part of the 600 billion yuan of maturing one-year medium-term lending facility, with the median estimate at 400 billion yuan. That would be the first monthly drainage since December 2021. The interest rate for the MLF will likely remain unchanged at 2.85 percent, according to the consensus estimate, as rising inflation risksin the market for the past few months, and has struggled to turn into loans that benefit the real economy. Seven-day interbank borrowing costs have slumped to a two-year low and are far below the short-term policy rate.