SEOUL (BLOOMBERG) - South Korea's jobless rate unexpectedly rose in October as the coronavirus kept businesses reluctant to hire.
The unemployment rate climbed to 4.2 per cent from 3.9 per cent in September, data from the statistical office showed on Wednesday (Nov 11). Economists had forecast the rate improving to 3.8 per cent. The nation shed 421,000 jobs from a year ago, an eighth straight month of declining employment.
The latest jobs data reflect the slow pace of economic recovery and add to reasons to quicken government spending to boost consumption and beef up quarantine efforts particularly ahead of winter, the Finance Ministry said in a statement.
While South Korea has brought a summer virus wave under control and social distancing rules have been eased, consumers and businesses remain wary of a potential flareup that could again hurt economic activity even as exports and industrial production show improvement.
"Businesses won't start hiring again until they feel confident the economy is back on track," said Jeong Won-il, an economist at Yuanta Securities. "The economy is showing signs of improvement primarily around durable goods, leaving service jobs behind in the recovery."
Jobs in the real estate industry contracted the most in percentage terms, with a 13 per cent decline from a year ago, falling by 73,000 positions from a year ago. The hotel and restaurant sectors lost 227,000 jobs, a 9.9 per cent decrease. Wholesale and retail businesses shed 188,000 positions, a 5.2 per cent fall.
The government's job creation efforts saw a 11 per cent increase in employment related to public, defense and social-security administration, adding 123,000 positions.