What to Know in China’s GDP Beyond the Headline Numbers

(Bloomberg) -- China’s economy slowed rapidly in the third quarter under the stress of a property slump and electricity shortages. 

Beyond the headline numbers though, the dataset had a few other interesting details: a surprise decline in the unemployment rate to the lowest level in almost three years; a drop in property sentiment well before the current crunch in the industry; and a retail sales rebound that diverged across different categories.

Here’s a closer look at the underlying details from China’s third-quarter gross domestic product data:

Increasing Jobs

Employment improved in the economy despite the slowdown in the third quarter, with the jobless rate dropping to 4.9% from 5.1% in the previous two months, its lowest level since December 2018 and well under the full-year target of 5.5%. 

The decline was notable among young people, who have generally struggled to find work in recent years. The jobless rate for those aged 16 to 24 years fell to 14.6% from a peak of 16.2% in July. 

Fu Linghui, a spokesman for the National Bureau of Statistics, told reporters Monday the recovery in the services sector has helped create jobs. Unemployment among young people dropped as more university graduates found jobs, and government initiatives to promote entrepreneurship and vocational training also helped ease job pressure, he said. 

Property Drag

The slowdown in the property sector weighed on the economy in the third quarter, but sentiment in the industry started to cool much earlier this year, according to a gauge compiled by the NBS. Tighter home sale restrictions to contain a rapid surge in property prices in some places early this year, as well as stringent rules on developers’ financing imposed from late last year, have contributed to the sector’s weakness. 

Restaurant Sales

A stronger-than-expected recovery in retail sales in September was one of the few bright spots in the economy in the third quarter. A closer look at the breakdown shows sales of restaurant and catering services posted a solid rebound, growing 3.1% from a year ago, reversing the 4.5% decline in the previous month. Authorities managed to bring a widespread delta virus outbreak under control in September and removed some Covid restrictions, prompting consumers to spend more on dining out. 

Furniture and car sales continued to weaken, a sign that consumers are still not willing to spend on some big-ticket items, especially those connected with home purchases.

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With assistance from Bloomberg