Korea Unemployment Rate Rises as Job Seekers Resume Hunt
(Bloomberg) -- South Korea’s unemployment rate climbed in October as a planned easing of virus-related restrictions allowed job seekers to resume hunting for work.
The jobless rate increased to 3.2% from 3% in September, the statistics office reported Wednesday. That was higher than economists’ forecasts for 3.1%. From a year earlier, the economy added 652,000 positions, marking an eighth straight month of gains.
Korea’s economy has been gearing up for a loosening of social distancing rules this month that will allow most restaurants to fully reopen and scale back limits on private gatherings. The labor market averted a significant slowdown during the latest coronavirus outbreak, but economists expect a normalization of activity and participation will lift unemployment going forward.
Today’s report showed the participation rate edged up by 0.1 percentage point from September to 62.8%; however, the reading is still well below the pre-Covid peak of 64.1% in early 2020.
From the previous month, the number of employed workers rose by 18,000, while those without work increased by a larger 51,000, resulting in a higher jobless rate. The finance ministry said employment has now recovered 99.9% of the pre-pandemic level.
What Bloomberg Economics Says..
“South Korea’s jobless rate is likely to continue to face further upward pressure through year-end and into 2022. That wouldn’t reflect a deterioration in the labor market. Rather, we expect it to be driven largely by increased labor force participation.”
Justin Jimenez, Asia economist
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In October, the health and social service sectors added 300,000 positions from a year earlier. Jobs increased by 163,000 in the transportation and warehouse industry and by 108,000 in education services. Restaurants and hotels added 22,000 jobs. The manufacturing sector shed 13,000 positions, less than in the previous month.
The Bank of Korea’s board will scrutinize the jobs data closely as it considers raising interest rates at the Nov. 25 policy review. Minutes of the October meeting showed a majority of the board favored further tightening as the economy recovers and financial risks mount.
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