South Korea Jobless Rate Rises Ahead of Park’s InaugurationEunkyung Seo
South Korea’s unemployment rate rose to a seven-month high in the final jobs report before incoming President Park Geun Hye takes office on Feb. 25.
The level was 3.2 percent in January, compared with 3 percent in December, Statistics Korea said in an e-mailed statement. The median estimate in a Bloomberg News survey of 11 economists was for a rate of 3 percent. The number of employed people increased by 322,000, or 1.4 percent, to 24.054 million last month from a year earlier.
Weaknesses in Asia’s fourth-biggest economy may make it more difficult for Park to fulfill pledges to create jobs for the young, older people and women. Record household debt is weighing on domestic consumption and the won’s gains against the yen threaten to undermine exports.
“Efforts to create jobs will take some time, especially when companies are still struggling with weak demand both at home and abroad,” Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul, said before the release. “The job market may see some temporary weakness, given that high-school and college students graduating in February are looking for jobs and cold weather has kept many construction workers idle.”
The Organization for Economic Cooperation and Development called on the government to promote the shift of more workers to regular jobs to aid long-term growth in a Feb. 5 report. One in four Korean workers is on a temporary contract, double the OECD average, the Paris-based organization said.
The won gained 24 percent against the yen in the past six months, according to data compiled by Bloomberg.
The seasonally unadjusted jobless rate was at 3.4 percent in January, up from 2.9 percent in December, today’s report showed.
In January last year, the seasonally-adjusted jobless rate was 3.2 percent. Manufacturing, healthcare and welfare service sectors led job increases last month while jobs in wholesale, retail and construction declined.
The Bank of Korea will keep the key interest rate unchanged for a fourth month at 2.75 percent tomorrow, according to 14 of 15 economists surveyed by Bloomberg News. In an interview last month, policy committee member Moon Woo Sik said that business confidence and investment may gain as risks recede from Europe’s debt crisis and the so-called fiscal cliff of spending cuts and tax increases in the U.S.