China rolled out a new measure of youth unemployment. It shows the nation's labor market is still a mess, think tank says

• China released a revised youth unemployment figure after not publishing data since June 2023.
• The new metric excludes students. December's youth unemployment stood at 14.9%.
• But this is still above broader joblessness and points to continued headwinds, Atlantic Council fellow Nicole Goldin wrote.

China's youth unemployment rate is once again available to the world, after a six-month blackout period where no new figures were published. Joblessness looks to have dropped considerably since the data was last released in June. 

But the new figure isn't exactly comparable to previous months — it now excludes full-time students from the calculation. On its face value, youth unemployment in December stood at 14.9%, whereas it touched 21.3% in the summer. 

Back then, the high-flying number was a focal point for economists, highlighting emerging challenges resulting from China's slowing economy. As fresh graduates poured into the nation's workforce, they faced stagnating industries with a weaker demand for labor.

These realities may still hold true, even if the revised methodology provides a smaller number, Nicole Goldin, a nonresident senior fellow at the Atlantic Council, wrote.  

"The lower result though, is still about three times the overall unemployment rate in China (5.1 percent) and reflects the quandary facing young people there. (For comparison, the OECD average is 10.5 percent.)," she wrote in a Friday post.

While headwinds to youth unemployment aren't exclusive to China, the country is mired in broader economic turmoil, from slowing consumption, a debt-burdened property sector, and a stock market in free-fall. 

Against this backdrop, the amount of new graduates is on the rise, estimated to reach 12 million this year, Goldin said. Not only are they coming up against a lack of jobs in general, but Beijing's crackdown on tech is limiting opportunities in industries most likely to hire them.

Meanwhile, China's falling birth rate is spurring concerns about its future labor force. With the number of newborns having dropped by 500,000 in 2023, young women in the country are facing pressure to raise families instead of pursuing work.

"The implications of the situation are stark not only as a drag on Chinese productivity and growth but, given the outsized role of China in the global economy, its weakening has the potential to impact youth labor markets worldwide," Goldin wrote. "That's especially true in countries — in Africa and Latin America for example — where Chinese development finance, investment, and trade are critical to their own dynamism and job creation amid debt distress."