China's services sector is firing and showing stronger signs of life as employment numbers rise, data showed Wednesday.
The official Caixin/Markit services Purchasing Managers' Index for October expanded at its fastest since 2013. The monthly increase, which has been gradually improving since April, saw hiring jump to its highest in a year.
The October PMI rose to 56.8 from September's 54.8 - the highest since June and an indicator of the service sector's steadily strengthening recovery.
The employment-heavy services sector accounts for about 60% of China's economy and half of all urban jobs. Unlike manufacturing, services have been slower to return to growth owing to the high numbers of unemployed Chinese and their slow return to work.
China's national unemployment rate in September in urban areas stood at 5.4% and 5.6% in August. Its unemployment rate hit 6.2% in February as COVID-19 began to bite.
Government data shows China companies hiring more people for the third consecutive month in October - making it the fastest since September 2019. Analysts said this suggested a strengthening recovery in the battered labor market hit by social distancing during the spring and summer.
"In the coming months, a continued recovery of the Chinese economy is highly likely, but it is necessary to be cautious about the normalization of monetary and fiscal policies in the post-epidemic period," said Wang Zhe, senior economist at Caixin Insight Group.
For the full year, the economy is projected to shrink to 2% - the weakest in more than three decades and a danger to the increase in employment.
Manufacturing continues its recovery from the coronavirus crisis, according to data out earlier this week. The Caixin/Markit Purchasing Managers' Index for manufacturing increased to 53.6 for October.
