South Korea’s jobless rate unexpectedly dips in sign of resilience

SOUTH Korea’s unemployment rate unexpectedly declined in February, suggesting the labour market is holding up in the face of elevated interest rates and slumping exports.

The jobless rate dropped to 2.6 per cent from 2.9 per cent in January, the statistics office said on Wednesday (Mar 15). Economists had expected it to edge up to 3 per cent. The economy added 312,000 positions from a year earlier.

The labour market is a key barometer of Korea’s economic performance following a year and a half of monetary tightening by the central bank. An export slump that’s weighing on growth, along with slowing consumption and weakening investment remain key risks to the employment outlook.

Korea’s economy contracted last quarter from the previous three months. With the outlook for the current quarter looking challenging, job gains are slowing in a sign of increased reluctance among employers to take on new hires.

Finance Minister Choo Kyung-ho also warned last week that the economy’s slowdown would likely weigh on employment. He pledged to speed up the implementation of funding for job creation.

Wednesday’s report showed:

• Retail and wholesale businesses lost 76,000 jobs, while manufacturing shed 27,000 positions.
• Restaurants and lodging businesses gained 176,000 roles, and the information-communications sector saw an increase of 43,000 jobs. BLOOMBERG