SEOUL: Unemployment rate in South Korea fell in June from a year earlier, but the unemployment rate for young adults remained high amid a protracted economic slowdown, a government report showed Wednesday. However, lackluster outlook persists for the country’s labor market in the near-term.
The unemployment rate for June came in at 3.6 percent, lower than the 3.7 percent in May but still higher than the 3.5 percent seen at the beginning of this year. Job creation edged up from the previous month. The number of employed people stood at 26.55 million in June, up 354,000 from a year earlier. It is much higher than the previous month’s 261,000 gain, data released by Statistics Korea showed Wednesday.
The unemployment rate for young people, aged between 15 and 29, reached 10.3 percent last month, up from May’s 9.7 percent. The unemployment rate for those aged under 29 hit an all-time high of 12.5 percent in February as tens of thousands of young people applied for the nationwide civil service exam at the time, overlapping with college winter vacation and graduation season, reports said.
The statistical agency further said that the accommodation and restaurant sector hired 2.3 million people last month, up 132,000 from a year ago, while the health and welfare industry employed 1.88 million, up 94,000 people on-year.
However, The unemployment rate in Ulsan, where the country’s leading shipyard Hyundai Heavy Industries Co. is headquartered, gained 0.4 percentage point on-year to 3.6 percent, while South Gyeongsang Province saw its rate soar 1 percentage point to 3.9 percent over the one-year period.
“In general, companies should be reluctant to hire (or to hire permanent workers), in the view that demand from the overseas markets will remain weak and the stimulus driven recovery in domestic demand is temporary,” DBS said in a recent research note. Meanwhile, a faster-than-expected rise in unemployment could drag down consumption growth, weaken inflation/inflation expectations, and thus put pressures on the BOK to further ease monetary policy, the report mentioned.
