China's retail sales rebounded in July while industrial production growth slowed, official data showed Thursday, highlighting an uneven recovery in the world's second-largest economy.

Industrial output grew 5.1 percent from a year earlier, data from the National Bureau of Statistics (NBS) showed, slowing from the 5.3 percent pace in June and below expectations for a 5.2 percent increase in a Reuters poll of analysts.

However, the NBS' monthly activity indicators showed retail sales, a gauge of consumption, rose 2.7 percent in July, quickening from a two percent increase in June and beating expectations for growth of 2.6 percent, a sign efforts to boost household spending were getting some traction.

On the jobs front, China's labour market remained stable in the January-July period as the surveyed urban unemployment rate dropped on a year-on-year basis, according to NBS data.

The average of surveyed urban unemployment rate stood at 5.1 percent in the first seven months of 2024, down 0.2 percentage points from the same period last year.

In July alone, the unemployment rate was 5.2 percent, up from five percent in June but still lower than 5.3 percent a year ago.

But analysts warn the broader outlook remained challenging for policymakers, suggesting more stimulus measures will be needed.

"The data shows that the economy has gotten off to a weak start in the second half of the year, and it is expected that the probability of replacing MLF with a RRR cut will increase, but key to maintaining five percent economic growth remains the arrival of fiscal spending," said ANZ China market economist Xing Zhaopeng.

He was referring to the People's Bank of China's medium-term lending facility and reserve requirement ratio.

On Thursday, the central bank injected cash through a short-term bond instrument and said it would conduct an MLF rollover later this month as it extends liquidity support to the financial system.

China's central bank at a meeting earlier this month said it would step up financial support to the broader economy and efforts would be directed more at consumers to spur consumption.

But with domestic demand weak and the outlook unclear, households and businesses are in no rush to borrow.

Calls for more growth boosting measures have dogged officials ever since a widely expected post-pandemic recovery failed to materialise in 2022.

Fixed asset investment expanded 3.6 percent in the first seven months of 2024 year-on-year, but also missed expectations for a 3.9 percent rise and also slowed from the 3.9 percent growth in the January to June period. (Agencies and Xinhua)