South Korea's jobless rate unexpectedly falls amid stimulus

SEOUL (BLOOMBERG) – South Korea’s unemployment rate unexpectedly fell in June, but remained well above levels seen before the pandemic struck, amid government efforts to stimulate the sagging labor market.

The unemployment rate edged down to 4.3 per cent from a 10-year high of 4.5 per cent in May, data from the statistical office showed on Wednesday (July 15). This was lower than the 4.5 per cent expected by economists in a Bloomberg survey. The nation shed 352,000 jobs, from the prior year, a fourth straight month of declining employment.

The slide in joblessness follows improvement in consumer and business confidence in recent weeks, as well as in export numbers. South Korea’s government has pledged hundreds of trillions of won in spending to revive economic momentum, including funding to help businesses retain workers.

The latest labor market report comes as the government doubled the size of its “New Deal” project, which is focused on creating tech and green-sector jobs, to 160 trillion won. The government aims to create 1.9 million jobs in industries that would foster growth after the pandemic. South Korea set the minimum wage hike at a record-low 1.5 per cent for 2021, a decision that was seen to reflect the challenging business environment as the outbreak persists.

The retail, lodging and restaurant sector was hit hardest with 361,000 jobs shed. Manufacturing lost 65,000 positions while 62,000 jobs were cut in construction. Public service and individual enterprises saw an increase of 64,000 jobs.

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