China's youth employment rate saw improvement after policymakers' revised data method

China said its youth unemployment rate improved in December after policymakers spent months changing their methodology on the figure that hit a record high last summer.

The jobless rate was 14.9 per cent last month for those between 16 and 24 years old, the statistics department of China said in a statement on Wednesday.

That figure excluded students, and compared to 21.3 per cent in June 2023.

However, the Chinese government said the new method reflected a more accurate picture of unemployment, but some economists cautioned the fresh criteria made it hard to assess the unemployment number in December.

“It is hard to conclude there was an improvement without comparing likes-to-likes,” said Michelle Lam, Greater China economist at Societe Generale SA. “Young people may prefer to attend masters' or vocational schools given the dire labor market situation,” he added.

The National Bureau of Statistics said it had studied international practices before adjusting its methodology to better suit China’s unique conditions. The statistics bureau would need to publish historical data using the tweaked formula to give a clearer context, economists suggest.

The Organisation for Economic Co-operation and Development, which includes the world’s advanced economies, defines the youth jobless rate as the percentage of unemployed youth between 15 and 24 year of age in the overall youth labor force. Unemployed people are those who are available and have taken active steps to find work in the past four weeks, according to the OECD.

“Calculating the jobless rates by age groups that do not include students can reflect more accurately the employment situation of youths that have entered the society,” Kang Yi, head of the NBS, said at a briefing in Beijing.

Students are focused on education, not looking for work, he added. Mixing students looking for part-time jobs with those who have graduated paints an inaccurate picture, Kang said.

Youth unemployment jumped in 2023, in a sign of a weakening economy as employers pulled back on hiring and favored workers with more experience.

Zhang Zhiwei, chief economist at Pinpoint Asset Management Ltd., said more information is needed from the NBS in order to assess the situation. “But it’s better to have data than not having it, because at lease we may be able to see how it changes from month to month in the future,” he further added.

The NBS also added a new jobless rate for people between ages 25 and 29 who are not students, which stood at 6.1 per cent in December. That group is in a more stable phase of job-seeking, Kang said, and has likely been in the market for several years. The nationwide urban jobless rate was 5.1 per cent in December.

The youth jobless rate, which began in 2018, tends to fall in winter and rise in summer, as students graduate from school and look for jobs. Even so, the rate has climbed throughout recent years as the job market deteriorated.