Unemployment is arguably the most important, but least well measured, factor in China’s economy.
Low unemployment and rising wages signal economic health, making it less likely that the government will rush to pump up growth. The reverse – mass layoffs and stagnant income – have China’s decision makers lunging for the stimulus button.
The official unemployment rate, which stays suspiciously close to 4% in the deepest downturns and the wildest booms, is no reliable guide.
Following last week’s gross domestic product data download, the focus is on the outlook for China’s economy in the fourth quarter and beyond. China Real Time mines the best alternative sources of data on China’s labor market as a guide: