(Bloomberg) -- China’s youth unemployment eased in August from a record in the previous month, a surprise slowdown at a time when new graduates usually flood the labor market. 

The surveyed jobless rate for those aged 16-24 slid to 18.7% last month from 19.9% in July, the National Bureau of Statistics said Friday, the first decrease in 10 months. The national urban unemployment rate also eased, to 5.3% from 5.4%. 

The improvement in the jobless rate came alongside better-than-expected figures for industrial production and retail sales as the economy shows some signs of recovery.

Youth unemployment usually peaks during graduation season around July and August each year, with a record 10.76 million students estimated to enter the job market this summer. 

Despite the improvement last month, the unemployment rate remains close to 20% for young people and will continue to be a concern to policy makers, especially ahead of the Communist Party’s twice-a-decade leadership congress next month.

The government has recently stepped up policy incentives to address the problem, including expanding subsidies to businesses that hire fresh university graduates. However, economists say structural changes in the economy mean the youth jobless rate will remain elevated.

“No amount of manufacturing and infrastructure stimulus would be effective in relieving” the problem, Morgan Stanley analysts including Robin Xing wrote in a report last week. “Younger cohorts prefer opportunities in services” and recent graduates “suffer from skill mismatch due to unrealized expectation of high growth in the tech and education sectors,” they said. 

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