South Korea’s Jobless Rate Returns to 3-Year Low on Service Industry Hires

South Korea’s unemployment rate fell back to a three-year low last month as jobs increased in the service industries and among retailers and wholesalers.

The jobless rate was 3.1 percent in October, compared with 3.2 percent in September, Statistics Korea said today in Gwacheon, south of Seoul. The rate fell to 3.1 percent in August, the lowest since 2008. The median estimate in a Bloomberg News survey of 11 economists was for a rate of 3.3 percent.

South Korea’s job market has so far withstood damage from slowing exports as service industries are hiring more workers. Concern that the European debt crisis and a global slowdown may weigh on the nation’s growth will probably prompt the Bank of Korea to keep borrowing costs unchanged Nov. 11, according to all 17 economists surveyed by Bloomberg News.

“The labor market will probably remain healthy in the fourth quarter, supporting the consumption outlook,” Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul, said before the release. “Still, the BOK policy rate will stay on hold into the first half of next year” due to the gloomy global outlook, slower economic activity and easing inflation.

The won fell 0.4 percent to 1,121.10 per dollar in Seoul yesterday, according to data compiled by Bloomberg. The benchmark Kospi stock index slid 0.8 percent.

The seasonally unadjusted jobless rate was at 2.9 percent in October, the lowest since November 2002, today’s report showed. The number of employed people increased by 501,000 to 24.673 million last month from a year earlier, the biggest gain since May 2010.

Export Growth Slows

In a sign of weakening overseas demand, South Korea’s exports increased at the slowest pace in two years last month, according to government data. The nation’s economic growth slowed to 0.7 percent last quarter from the second quarter, when it expanded 0.9 percent, the central bank said last month.

Samsung Electronics Co., the world’s largest maker of memory chips and TVs, said last month its third-quarter net profit decreased 23 percent from a year earlier as computer- memory chip and panel sales slumped.

Employment in manufacturing fell 1.3 percent from a year earlier, while the number of people self-employed or working in the public services increased 3.3 percent.

The number employed in the electricity, transportation, telecommunications and finance rose 5.6 percent, while jobs in the agricultural, fishery and forestry industries declined 1.8 percent.

Health and welfare services added 141,000 jobs while wholesalers and retailers added 128,000 jobs in October from a year ago, the data showed.

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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