China's unemployment rate surged to 6.1% in April, which is near the figures recorded in February 2020, the early phase of the COVID-19 pandemic.
The figures came as the world's second-largest economy experienced a significant slowdown due to intensified lockdowns as the Chinese government attempted to curb the spread of the virus.
According to a BBC report, government statistics indicate that retailers and manufacturers were also badly affected.
Amid the worst outbreaks of the virus since 2020, Chinese Premier Li Keqiang recently called the country's labor scenario "complicated and grim."
Retail sales in China dropped 11.1 % in April compared to the same period last year, the biggest fall since March 2020, as per Beijing's National Bureau of Statistics.
Despite this, the administration targets to keep the jobless rate below 5.5% throughout the year.
Bleeding Chinese Economy
Official data also indicate that retail sales fell by 11.1 % in April from a year earlier, the largest drop since March 2020. The figure was significantly worse than the 3.5 % decrease in March, and it fell short of economists' projections of a 6.1% drop.
Around the period, industrial output declined 2.9% from one year ago, as supply chains were disrupted by steps to stem the transmission of COVID-19- the worst drop since February 2020, and it reflected a turnaround of March's 5% rise.
China's severe economic slowdown in April was mostly driven by the country's "dynamic zero COVID" policy, which drastically interrupted economic operations and led consumption and production to plummet.
The worsening economic situation comes as authorities have implemented complete or partial lockdowns on several Chinese cities, including the financial hub Shanghai, where more than 25 million citizens have been subjected to harsh restrictions since late March, according to Al Jazeera.
China's Economic Slowdown Impacts European Stocks
Meanwhile, China's economic slowdown was among the reasons European shares fell on Monday.
European stock indexes opened lower after oil prices slid, and riskier currencies took a hit during the Asian session as unexpectedly weak economic data from China highlighted fears about a slowdown in growth, as per a report from Reuters, given the mentioned steep decline in retail sales and industrial output drop in April.
As a result, investors are concerned that rising interest rates due to inflation may harm the global economy. Last week, global stocks hit their lowest point in 18 months as a result of these anxieties.
The MSCI world equity index (.MIWD00000PUS), which monitors stocks in 50 nations, was flat on the day at 0732 GMT, but it was still above last week's low points.
The STOXX 600 index in Europe was down 0.5 % (.STOXX), while the FTSE 100 in London was down 0.4 % (.FTSE).
In a letter to clients, ING rates strategists wrote, "This week's events calendar is relatively quiet, so markets are more than ever at the mercy of headlines related to the global growth outlook."
Despite the current "gloomy" risk mood, business experts believe investors have demonstrated that they are increasingly focused on "recession risk."
Government bond yields in Europe rose a slight bit, with Germany's 10-year yield rising three basis points to around 0.974 %, still well below the almost eight-year peak of 1.19 % attained last Monday.
According to ECB policymaker Pablo Hernández de Cos, the European Central Bank will most likely opt to conclude its stimulus program in July and hike interest rates "very soon" afterward.