South Korea’S Jobless Rate Falls To Lowest Since October 2008
June 08, 2010, 8:31 PM EDT
By Eunkyung Seo
June 9 (Bloomberg) — South Koreas unemployment rate declined in May to the lowest level since October 2008 as the nations strengthening economy prompted companies to hire.
The jobless rate fell to 3.2 percent from 3.7 percent in April, after reaching a 10-year high of 4.8 percent in January, Statistics Korea said today in Gwacheon, citing seasonally adjusted figures.
The private sector seems to be beginning to lead the economic recovery and jobs market, said Park Sang Hyun, an economist at HI Investment & Securities Co. in Seoul. The strong job data may give support for a rate increase but the central bank will likely wait to see how the European debt crisis will evolve.
Asias fourth-largest economy expanded a faster-than- expected 2.1 percent in the first quarter and the central bank forecasts growth of more than 5 percent this year. Even so, Bank of Korea Governor Kim Choong Soo will leave the benchmark interest rate at a record-low 2 percent when his board meets tomorrow, according to all 12 economists surveyed by Bloomberg.
The benchmark Kospi stock index rose 0.8 percent to 1,651.48 yesterday. The won touched a one-week low to close at 1,233.48 per dollar in Seoul, while the yield on the 4.5 percent note due March 2015 rose one basis point to 4.31 percent.
Government Priority
President Lee Myung Bak has made job creation a priority this year. The government spent 108.6 trillion won ($88 billion) in the first four months, including on infrastructure and social welfare projects, exceeding its earmarked expenditure, according to Finance Ministry figures.
Governor Kim said yesterday the jobs market will only improve at a gradual pace unless the government promotes small businesses that will boost hiring.
Employment conditions are expected to improve, but its only a recovery from the shock from the global financial crisis, the governor said at a forum in Seoul.
The unadjusted jobless rate was 3.2 percent in May, compared with 3.8 percent in April, todays report showed. The number of employed people rose by 168,000 to 23.97 million in May from April, on a seasonally adjusted basis.
The number of people self-employed or working in the public-service sector climbed 4.7 percent and hiring in the manufacturing sector advanced 4.9 percent, todays report showed. People employed in the construction industry increased 2.6 percent from a year earlier, while jobs in the agricultural, fishery and forestry sectors declined 4.7 percent.
–Editors: Michael Heath, Michael Dwyer
To contact the reporters on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net
To contact the editor responsible for this story: Chris Anstey in Tokyo at canstey@bloomberg.net