South Korea Flags Uncertain Job Outlook as Omicron Spreads
Korea Jobless Rate Fall as Virus Curbs Eased Before Resurgence
(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.
South Korea’s job indicators improved in November, but the government said the outlook was uncertain due to a resurgence of Covid that has included local cases of the more contagious omicron variant.
The unemployment rate fell to 3.1% from 3.2% in October, the statistics office reported Wednesday. The economy added 553,000 jobs compared with a year earlier, gaining for a ninth straight month.
Still, the finance ministry remained wary on the outlook, saying in a statement that although the job market has improved, the government is watching with caution because retailers, restaurants and accommodations are still suffering and there is growing uncertainty from the virus.
Prime Minister Kim Boo-kyum on Wednesday said restrictions on business hours and the size of private gatherings may be reinstated. The relaxation of virus curbs last month after vaccination rates hit key thresholds had helped stabilize the jobs market and given a particular fillip to hiring in the services sector.
How the labor market holds up in the face of a worsening virus situation will factor into the Bank of Korea’s policy decisions. Having hiked rates twice since August, the BOK is weighing the timing of a third increase, which investors expect to happen within the next three months.
What Bloomberg Economics Says...
“The recovery in the job market may see some volatility as a resurgence in Covid-19 cases is prompting households and firms to exercise renewed caution and the government to re-tighten virus curbs. These could pull the jobless rate in either direction, depending on whether participation or employment faces a bigger blow.”
-- Justin Jimenez, Asia Economist
To read the full report, click here.
In November, the health and social service sectors added 279,000 positions from a year earlier. Employment increased by 148,000 in the transportation and warehouse industry and by 105,000 in education services.
The wholesale and retail sector lost 123,000 jobs, while restaurants and hotels shed 86,000 jobs. The manufacturing sector added 51,000 positions. The seasonally-adjusted participation rate held steady at 62.8%.
“There could be monthly fluctuations in the jobs data, especially for those sectors sensitive to Covid restrictions, but the overall trend of the job market recovery should continue as the trend toward living with the virus persists,” said An Young-jin, an economist at SK Securities.
©2021 Bloomberg L.P.