HSBC's China PMI for employment sub-index worsened to 47.4 in July from 48.8 in June, its lowest level since March 2009, and has decreased consecutively for five months, Hexun.com reported on Thursday. 

According to HSBC, China manufacturing PMI rebounded to a three-month high of 49.3 in July from 48.2 in June, extending the current period of below-50 readings into the ninth consecutive month.

The current slackness in labor market is evidenced by both the HSBC and official PMIs, pointing to the slower employment growth and easing wage growth for migrant workers, despite the official reports of stable urban registered unemployment ratio.

Official data shows that the unemployment ratio has unchanged at 4.1% since the third season in 2010, compared with the previous peak of 4.3% during the crisis time in 2009.

Experts said as the labor market is a lagging indicator of economic cycles, a further deterioration of employment conditions remain possible.

Beijing policy makers are well aware of these risks and willing to react proactively. Premier Wen recently restated employment as a top priority. Growth and employment again topped the policy agenda for 2H.

In addition to the latest twointerest rate cuts, some concrete supporting measures have already come through, including the extension of VAT reform program from Shanghai to ten other provinces/cities starting from 1 August 2012.