China recovery faces pressure after April activity weak, youth unemployment rises

A worker carries a ladder as he works on a window display for a clothing store at a shopping mall in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

Construction workers load a cart outside of a storefront under renovation at a shopping mall in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

A worker delivers goods at a mall in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Ng Han Guan)

Commuters walk across an intersection during the morning rush hour in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

People eat breakfast as they sit outside a bakery at a shopping mall in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

Commuters walk across an intersection during the morning rush hour in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

People pick up parcels from a delivery courier outside an office building in Beijing, Tuesday, May 16, 2023. China’s economic recovery faces pressure from sluggish consumer and export demand, a government official said Tuesday, after retail sales and other activity in April were weaker than expected. (AP Photo/Mark Schiefelbein)

BEIJING (AP) — Chinese leaders face pressure to shore up a slowing economic recovery and generate jobs after consumer spending and other activity in April were weaker than expected and a survey found 1 in 5 young workers in cities was unemployed.

Retail sales accelerated following the end of anti-virus restrictions in December but were below forecasts, official data showed Tuesday. Factory output edged down compared with March.

Chinese economic activity has improved while the U.S. and European economies are cooling after interest rate hikes to extinguish inflation. But consumers, uneasy about possible job losses, are returning to shops and restaurants less quickly than expected.

“The pace of recovery has slowed sharply,” said Larry Hu and Yuxiao Zhang of Macquarie in a report.

Growth in retail sales accelerated to 18.4% over last year's depressed level in April, but that was below private sector expectations of up to 35%.

Factory output rose 5.6% over a year ago but was off 0.5 percentage points from March. Investment in factories, real estate and other fixed assets rose 4.7% in the first four months of 2023 but slowed from the first quarter’s 5.4% growth rate.

“The recovery of demand is still insufficient,” said Fu Linghui, spokesperson for the National Bureau of Statistics.

“External demand has weakened” and exporters face a “complex and severe” environment, Li said at a news conference.

Surveys found 20.4% of potential urban workers aged 16 to 24 are unemployed and the figure was rising, according to Li.

That was a record, according to private sector economists.

“Stabilizing and expanding employment of young people will require continued hard work,” Li said.

Economic growth accelerated to 4.5% over a year earlier in the three months ending in March from the previous quarter’s 2.9%. Growth will have to accelerate in coming quarters to hit the ruling Communist Party’s annual target of “around 5%.”

“The bulk of China's rebound is now behind us,” Capital Economics said in a report. “The challenging global picture will prevent much pick-up in Chinese exports.”