High-ranking official Li Zhong says job market facing ‘big challenges’ amid rising uncertainties.
China will focus on creating jobs and promote fiscal, monetary and industrial policies to stabilise its labour market, a top official has said.
China’s economy has struggled to rebound from lockdowns and slowing global growth, with the youth unemployment rate surging to a record high of 19.9 percent in July. Unemployment insurance payouts hit an all-time high in June.
China’s employment situation has remained generally stable for a long time, but there has been persisting long-term pressure, Li Zhong, vice minister of human resources and social security, said on Thursday.
“Structural contradictions have become more prominent with rising uncertainties and unstable factors. The job, employment, work still faces big challenges,” he said during a news conference.
The world’s second-biggest economy was affected by extended COVID-19 lockdowns in spring, which disrupted factory output and supply chains and hurt job-creating small businesses. The private sector provides a third of all jobs in China and creates 90 percent of new urban jobs, state media have reported.
“Amid sporadic COVID-19 outbreaks in some regions since the beginning of this year, job demand in the market has reduced and some recruitment campaigns have been cancelled or delayed,” Zhang Ying, director of employment promotion at the ministry, said at the same news conference.
“Some young job hunters have encountered new difficulties.”
China will focus on helping college graduates and migrant workers get jobs in the next step.
To prop up the economy, China added 19 new policies on top of existing measures, including raising the quota on policy financing tools by 300 billion yuan ($43.69bn), state media cited the cabinet as saying after a regular meeting chaired by Premier Li Keqiang on Wednesday.
Authorities will take “timely and decisive measures, maintain a reasonable policy scale and make good use of policy tools in the toolkit, and intensify efforts to consolidate the foundation for economic recovery,” the cabinet added.
South Korea’s factory output falls in warning for global economy – Al Jazeera English
Asia’s fourth-largest economy sees industrial output shrink a worse-than-expected 1.8 percent in August.
South Korea’s factory production fell for a second straight month in August, a warning sign for the global economy as it faces risks from the war in Ukraine to rising interest rates.
Asia’s fourth-largest economy saw industrial output shrink a worse-than-expected 1.8 percent on a seasonally-adjusted monthly basis after falling 1.3 percent in July, government figures showed on Friday.
Compared with the same month a year earlier, factory output rose 1.0 percent, the slowest pace since September 2021.
However, output for the services sector rose 1.5 percent on the month, while retail sales jumped 4.3 percent, the fastest gain since May 2020.
The figures follow a raft of data showing slowing factory output in other major Asian economies, including China, Japan and Taiwan.
China’s factory activity slowed further in September following a decline the previous month, as Beijing’s ultra-strict “zero COVID” policies hit production and sales, according to a private sector survey released on Friday.
South Korea, one of the world’s biggest manufacturers of cars, chips and ships, is seen as a barometer of the health of global trade as its companies span a vast swathe of the world economy.
South Korea’s exports, which account for nearly 40 percent of gross domestic product (GDP), are expected to slow sharply in September, with a survey of economists by the Reuters news agency predicting the slowest growth in nearly two years ahead of the release of official figures next month.
“This is certainly concerning for the domestic and global economy,” Min Joo Kang, senior economist for South Korea and Japan at ING, told Al Jazeera.
“The weaker than expected industrial production was driven by Korea’s main export items such as semiconductors and petrochemicals. This would have a negative impact on GDP for Korea for sure and also suggests global demand weakness. Usually it takes 4-5 quarters for semiconductors to come out of their downward cycle, thus the bottom hasn’t come yet.”
German Economy Seen Shrinking Next Year Due to Energy Crisis – BNN Bloomberg
(Bloomberg) — Germany’s economy will likely contract by 0.4% next year due to the impact of the energy crisis, according to the nation’s leading research institutes, who slashed their forecast from April of a 3.1% expansion.
German output will be €160 billion ($154 billion) lower this year and next than projected five months ago partly due to the drastic increase in energy costs, the four institutes predicted Thursday in a twice-yearly report which the government uses as guidance for its own outlook.
“The Russian attack on Ukraine and the resulting crisis on the energy markets are leading to a noticeable slump in the German economy,” said Torsten Schmidt, head of economic research at the RWI Institute and spokesman for the Joint Economic Forecast Project Group.
Germany is one of the countries hardest hit by the energy emergency triggered by the Ukraine war thanks to a reliance on Russian fuel imports built up over decades. Chancellor Olaf Scholz’s ruling coalition is racing to cut back that dependence but Germany still faces a tough winter with the prospect of gas rationing and blackouts.
The government has assembled three packages of aid measures worth nearly €100 billion to offset the impact on households and companies but has also cautioned that it doesn’t have the resources to ease the pain completely.
“Record inflation rates, especially exploding energy prices, are hitting many companies hard,” Martin Wansleben, managing director of the DIHK industry lobby, said Thursday in an emailed statement.
“The consequences are production stops, losses in value creation, the relocation of production abroad and even plant closures,” he added. “The number of companies that either do not receive any energy supply contracts at all or only receive them at extreme prices is currently increasing.”
Although the energy crunch is expected to ease over the medium term, gas prices are likely to remain well above pre-crisis levels, meaning “a permanent loss of prosperity for Germany,” the institutes warned.
They cut their growth estimate for this year to 1.4% from 2.7% and said they expect inflation to accelerate in coming months, climbing to an average rate of 8.8% next year — compared with 8.4% this year — before gradually falling back toward 2% in 2024.
Europe’s biggest economy will likely return to growth in 2024, with expansion of 1.9%, the institutes predicted.
The four institutes which compile the twice-yearly forecasts are Munich-Based Ifo, the IfW in Kiel, the IWH in Halle and the Essen-based RWI. The Wifo and the IHS institutes in Vienna also contribute. The government is expected to publish updated economic projections next month.
(Updates with industry lobby comment from sixth paragraph)
©2022 Bloomberg L.P.
U.S. economy shrinks at 0.6% annual rate in Q2 – Advisor's Edge
Consumer spending grew at a 2% annual rate, but that gain was offset by a drop in business inventories and housing investment.
The U.S. economy has been sending out mixed signals this year. Gross domestic product, or GDP, went backward in the first half of 2022. But the job market has stayed strong. Employers are adding an average 438,000 jobs a month this year, on pace to be the second-best year for hiring (behind 2021) in government records going back to 1940. Unemployment is at 3.7%, low by historic standards. There are currently about two jobs for every unemployed American.
But the Fed has raised interest rates five times this year — most recently Sept. 21 — to rein in consumer prices, which were up 8.3% in August from a year earlier despite plummeting gasoline prices. Higher borrowing costs raise the risk of a recession and higher unemployment. “We have got to get inflation behind us,” Fed Chair Jerome Powell said last week. “I wish there was a painless way to do that. There isn’t.”
The risk of recession — along with persistently and painfully high prices — poses an obstacle to President Joe Biden’s Democrats as they try to retain control of Congress in November’s midterm elections. However, drops in gasoline prices have improved consumers’ spirits in the past two months.
Thursday’s report was the Commerce Department’s third and final take on second-quarter growth. The first look at the economy’s July-September performance comes out Oct. 27. Economists, on average, expect that GDP returned to growth in the third quarter, expanding at a modest 1.5% annual pace, according to a survey by the data firm FactSet.
Commerce also on Thursday released revised numbers for past years’ GDP. The update showed that the economy performed slightly better in 2020 and 2021 than previously reported. GDP rose 5.9% last year, up from the previously reported 5.7%; and, pounded by the coronavirus pandemic, it shrank 2.8% in 2020, not as bad as the 3.4% previously on record.
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