Business | Economy

South Korea unemployment rate falls to seven-month low

Increase seen in number of self-employed workers and service-sector jobs

  • Bloomberg
  • Published: 16:43 August 16, 2012
  • Gulf News

  • Image Credit: BLOOMBERG NEWS
  • Commuters fil a subway station in Seoul. The outlook for the labour market is clouded by signs that Asia’s fourth-largest economy is losing steam.

Seoul: South Korea’s unemployment rate unexpectedly fell to a seven-month low on increasing numbers of self-employed workers and service-sector jobs even as Europe’s debt crisis dragged down exports.

The jobless rate was at 3.1 per cent in July, compared with 3.2 per cent in June, Statistics Korea said on Thursday in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 14 economists was for a rate of 3.3 per cent.

The outlook for the labour market is clouded by signs that Asia’s fourth-largest economy is losing steam. A decline in exports in July was the steepest since 2009 and the central bank said on August 9 that domestic demand is also weakening.

“Jobs are increasing in the service sector and the self-employed are lifting the total number of workers, but Europe’s fiscal crisis is taking a toll on company hiring,” said Sun Yoo, an economist Woori Investment & Securities Co in Seoul. “The quality of the job market is deteriorating with more people taking non-salaried work.”

The won weakened 0.3 per cent to 1,133.00 per dollar at the 9.00am open in Seoul and the benchmark Kospi stock index was little changed.

The number of employed people increased by 470,000 to 25.1 million in July, with the self-employed and public services providing 318,000 of those new jobs. The seasonally unadjusted jobless rate was also at 3.1 per cent in July, compared with 3.2 per cent in June, Thursday’s report showed.

Deepening Crisis

The Bank of Korea kept borrowing costs at a 14-month low on August 9, while saying in a statement that Europe’s debt crisis is deepening. Gross domestic product in Asia’s fourth-largest economy grew at the slowest pace in almost three years last quarter.

“Job market figures have been coming in quite good, but there are an increasing number of self-employed people earning a small amount of income,” said Lee Min Koo, an economist at Eugene Investment & Securities Co Seoul. “That hidden number not represented in the overall jobless rate will likely drag on the domestic economy.”

South Korean manufacturers’ confidence dropped to a three-year low for August and consumer confidence fell to a five-month low in July, the central bank said last month.

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