By Joe Cash

BEIJING (Reuters) – The jobless rate for 16- to 24-year olds in China, excluding students, rose to 17.1% in July from 13.2% the prior month, according to the country’s statistics bureau. This increase reflects employer hesitance in the lackluster $19 trillion economy.

Amid multiple crises, from a trade war to a prolonged property downturn and cautious consumer confidence, analysts predict a period of sluggishness for the world’s No.2 economy as it heads into the second half of the year.

With around 12 million students graduating this summer, even remote rural roles are attracting young graduates, resulting in the toughest job market in years.

Youth unemployment hit a record high of 21.3% in June last year, leading China to stop publishing this benchmark while excluding enrolled students. The July figure marked the highest since December 2023, after methodological changes.

The unemployment rate for 25- to 29-year-olds was 6.5%, and 3.9% for those 30 to 59 years old, both figures excluding college students.

A factory managers’ survey for July indicated that the manufacturing sector remains reluctant to hire, with its employment gauge last expanding in February 2023, reflecting a sluggish domestic economy.

Conversely, employment in the services sector rose at the fastest pace in 11 months in July, as indicated by a Caixin/S&P Global services purchasing managers’ index survey. This provides some optimism to officials worried about a youth job crisis testing the ruling Communist Party’s economic leadership.