Weekly Economic Briefings > Emerging Markets Weekly Economic Briefing

We assess labour market developments, both the secular trends and more recent developments, in order to check the state of the economy and prospects for the income growth that is key to China's consumption story. While urban labour markets have softened, there are no signs of any real weakness yet and wage growth remains solid.In emerging markets such as China, under-utilization of labour largely shows up in the reservoir of rural 'surplus labour' employed in agriculture, rather than in the unemployment statistics.  Most of the action during development takes place on the rural-urban nexus, with rising urban labour demand from the expansion of industry and services pulling in more migrants. Stuttering urban job creation would show up on this nexus.In China, rapid urban job creation since 2000 has allowed surplus labour in agriculture to fall substantially, with the share of people employed in agriculture falling from 50% in 2002 to 28% in 2015, mostly through service sector job growth.In recent years, the pace of urban job growth has moderated. However, the expansion of the overall non-agricultural economy has not slowed down that much as a result of continued steady employment growth in the 'modern' economy in rural areas.For 2016, high frequency indicators indicate that, despite some softening, the demand-supply situation in the labour market has remained quite favourable for employees. Wage developments point in the same direction.