China's housing slump isn't hurting jobs, yet

Tomohiro Ohsumi | Bloomberg | Getty Images

Employment in the world's second largest economy remains resilient even as the real-estate sector experiences a severe downturn.

"The labor market as a whole appears to be holding up remarkably well," Capital Economics said in a note. "The figures are particularly encouraging given that rural to urban migration has already peaked."

Real estate and wider construction is the second biggest source of employment for migrant workers, according to Capital Economics, a group that constitutes nearly a fifth of the population.

Read MoreChina's growth in danger of slowing more sharply

Yet, five straight months of falling home prices in a market plagued by excess supply hasn't weighed on job creation. 10.8 million urban jobs were created in the first nine months of 2014, data released in October showed, up 160,000 on year and meeting the government's full-year target of 10 million jobs ahead of schedule.

As of September, 175.6 million rural workers were working away from their hometown, 1.7 million more than a year before, according to data from Citi Research. Meanwhile, the registered urban jobless rate stood at 4.07 percent at the end of September, below the government's annual unemployment control rate of 4.6 percent.

"The tight labor market has ensured that wage growth has remained strong and continued to outpace gross-domestic product (GDP) growth. Migrant wages were up 9.5 percent on year in nominal terms in Q3. This means that average households are enjoying a greater share of national income, which ought to help rebalance the economy towards consumption," the report said.

Read MoreChallenges China faces for its future: Kevin Rudd

Data problems

China lacks reliable labor market data, experts say.

A separate gauge that excludes migrant workers showed unemployment at 5 percent in August. Premier Li Keqiang repeatedly referred to this indicator - the survey-based unemployment rate (SBUR) - in recent months when saying slower growth is acceptable as long as job creation remains strong.

However, the SBUR gauge isn't regularly published and official sources suggest the market may have to wait another year before it is.

Read MoreWorkplace gender equality in Asia: Is China ahead?

Challenges on the horizon

China faces an overall labor shortage, Citi says, based on data collected by employment service agencies in 100 principal cities.

"The ratio of job vacancies to job applicants (demand-supply ratio) has shown a rising trajectory since the financial crisis, and stood at 1.09 in the third-quarter this year. In addition, labor shortage has been affecting all the regions. The demand-supply ratios also suggest relatively high demand for people with high school degrees and vocational certificates as well as those with postgraduate degrees, but low demand for undergraduates," Citi said.

Read MoreWhy the yuan's fundamentals are weakening

Economists also point to a surge in the number of strikes this year as a sign of trouble.

More than 1,000 workers at a Foxconn plant went on strike in October, demanding higher wages. This past year has seen protests at the China offices of IBM, PepsiCo, Wal-Mart Stores and footwear manufacturer Yue Yuen Industrial Holdings.

However, Capital Economics believe the strikes suggest workers feel their bargaining power has improved.

Read MoreGlobal jobs dilemma?Blame it on technology

"We suspect that the upward trend in the number strikes in recent years reflects the fact that workers have become more assertive as they have become wealthier and better educated about their rights," it said. "Another factor may be the spread of cheap smartphones which means that workers are better informed about conditions (and strikes) elsewhere."