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Hong Kong’s Unemployment Rate Rises to Highest Since 2009

Hong Kong’s Unemployment Rate Rises to Highest Since 2009

(Bloomberg) -- Hong Kong’s jobless rate rose for a seventh straight month to the highest in more than a decade, as the economy remains mired in recession amid the coronavirus pandemic and braces for the prospect of renewed political unrest.

The jobless rate for the February-to-April period rose to 5.2%, worse than the median estimate of 4.6% among economists surveyed by Bloomberg. The level is the highest since October 2009, the data show.

Hong Kong’s Unemployment Rate Rises to Highest Since 2009

The rise extended the longest stretch of increases since the aftermath of the global financial crisis.

“The labor market will continue to face immense pressure in the near term,” said Law Chi-kwong, Hong Kong Secretary for Labour and Welfare, in the release. “The labor market showed further sharp deterioration as the Covid-19 pandemic continued to weigh on a wide range of economic activities.”

The underemployment rate jumped to 3.1%, the highest in more than 15 years, while year-on-year declines in total employment and the labor force widened further to fresh records, according to the government release.

Unemployment in the consumption and tourism-related sectors soared to 9%, also the highest in more than 15 years, with joblessness in the food and beverage industry hitting 12%.

Higher unemployment is the latest indicator of Hong Kong’s deepening economic malaise. The economy contracted a record 8.9% in the first quarter amid restrictions and closures to contain the virus, according to the final reading from the Census and Statistics Department Hong Kong on May 15.

While economies around the world are looking toward a post-virus recovery, Hong Kong is bracing for a potential return of the anti-government protests that plunged the city into recession last year.

Hong Kong’s retailers in particular are hurting, and one in four could disappear by December if sales don’t improve, according to Hong Kong Retail Management Association Chairman Annie Yau Tse. The group estimates there are about 62,400 retail stores in the city, putting some 15,000 shops at risk.

The Hong Kong government has introduced about HK$287.5 billion ($37 billion) of virus-related aid this year, including a wage subsidy program.

“I believe it can alleviate unemployment to a certain extent,” Financial Secretary Paul Chan said in a May 17 Chinese-language blog post.

©2020 Bloomberg L.P.