South Korea Unemployment Rate Held at 3-Year Low on Services
South Korea’s unemployment rate held at a three-year low last month as jobs in the health and welfare service sectors added to hiring by wholesale and retail companies.
The jobless rate was at 3.1 percent in December, unchanged from November, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 12 economists was for a rate of 3.2 percent. The number of employed people increased by 441,000 to 24.1 million last month from a year earlier after adding 479,000 in November.
South Korea’s service industries have hired workers, helping to offset the effect of slowing export growth on the job market. Concern over the global economy and cooling domestic output may compel the Bank of Korea to refrain from raising interest rates this week, according to all 14 economists surveyed by Bloomberg News.
“We expect the labor market slowed marginally in December,” Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul, said before the release. “The deteriorating global economic outlook and the continuing slowdown in activity lower the chance of a rate hike.”
The won rose 0.6 percent to close 1,156.69 per dollar in Seoul yesterday, according to data compiled by Bloomberg. The benchmark Kospi stock index gained 1.5 percent.
South Korea’s inflation exceeded the central bank’s target, with consumer prices rising 4.2 percent from a year earlier, Statistics Korea said in a Dec. 30 report. Industrial production unexpectedly fell in November for a second straight month, according to a separate government report.
“A rate cut also looks unlikely at this junction, given still-elevated inflation,” Oh said.
New Year Hiring
South Korean conglomerate SK Group said on Jan. 5 it would more than double investment to 19 trillion won ($16.5 billion) this year from 2011 and hire 7,000 more workers. Retailer Shinsegae group announced this week a plan to recruit 8,000 workers in 2012, up 21 percent from a year ago.
The central bank projected last month that new jobs will decline to 280,000 this year from 400,000 last year, with jobless rate at 3.4 percent. The bank cut its growth forecast for this year to 3.7 percent from 4.6 percent estimated in July, compared with a 3.8 percent gain last year.
The seasonally unadjusted jobless rate was at 3.0 percent in December, compared with 2.9 percent in November, today’s report showed.
Employment in manufacturing fell 2.1 percent from a year earlier, while the number of people self-employed or working in the public-service sector increased 2.8 percent.
The number employed in the electricity, transportation, telecommunication and finance sectors rose 5.1 percent, while jobs in construction gained 6.1 percent.
Wholesalers and retailers added 109,000 jobs while the health and welfare service sector added 90,000 jobs in December from a year ago, the data showed.
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