(Updates with comments from analyst in fourth paragraph.)
Sept. 21 (Bloomberg) -- South Korea’s unemployment rate fell to a three-year low as the economy’s expansion boosted hiring in the service sectors.
The jobless rate was at 3.1 percent in August, the lowest since July 2008 and down from 3.3 percent in the previous month, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of eight economists was for a rate of 3.3 percent.
Sustained job growth has been fueling inflation exceeding the central bank’s target since January, prompting the bank to raise the benchmark interest rate three times this year. Still, Bank of Korea Governor Kim Choong Soo kept borrowing costs unchanged for a third month on Sept. 8, saying the bank may not be able to resume rate increases until “external” factors such as Europe’s debt crisis look to be under control.
“The jobless rate is low and supportive for consumption,” Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong, said before the release. “I think they are done with the rate tightening cycle. But the recent drop in the won may keep them vigilant.”
The won fell 1 percent to 1,148.90 per dollar as of 3 p.m. in Seoul yesterday, according to data compiled by Bloomberg. It touched the weakest level since Dec. 22 on concerns the deepening European debt crisis may spur an exodus from emerging- market assets. The benchmark Kospi stock index gained 0.9 percent.
The job numbers reflect the nation’s “strong” economic fundamentals and are a “big surprise,” Finance Minister Bahk Jae Wan said at a government meeting today.
The seasonally unadjusted jobless rate was at a nine-month low of 3.0 percent in August, compared with 3.3 percent in July, today’s report showed. The number of employed people increased by 490,000, or 2 percent, to 24.495 million last month from a year earlier.
Employment in manufacturing fell 0.7 percent from a year earlier, while the number of people self-employed or working in the public-service sector rose 3.5 percent.
The number employed in the electricity, transportation, telecommunication and finance sectors rose 6.7 percent, while jobs in the agricultural, fishery and forestry industries declined 2.2 percent.
--With assistance from Ailing Tan in Singapore. Editors: Ken McCallum, Cherian Thomas
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