South Korea’s workforce swelled in February as the economy’s resilience to a Europe-induced export slump helped spur more people to look for jobs, pushing up the unemployment rate by the most in two years.
The number of employed people increased by 51,000 to 23.8 million last month from January, the first monthly gain since October, Statistics Korea said in Gwacheon today. The jobless rate jumped to 3.7 percent from 3.2 percent, the biggest increase since January 2010 and higher than the median estimate for 3.2 percent in a Bloomberg News survey of 11 economists.
Asia’s fourth-largest economy, which grew the least last quarter in two years, is getting some support from the government accelerating spending and the central bank keeping interest rates on hold for nine months. The unemployment rate was still lower than the 3.9 percent in February 2011.
“We believe this jump was due to the larger-than-expected influx of college graduates and other job seekers in the job market,” Wai Ho Leong, a senior regional economist at Barclays Capital (JNK) in Singapore. “It masks the underlying strong labor market conditions.”
The Bank of Korea said last week the economy appears not to be slowing further and will likely return to its long-term growth track.
The won fell 0.1 percent to 1,122.95 per dollar in Seoul as of 10:39 a.m., according to data compiled by Bloomberg. The benchmark Kospi stock index gained 1.3 percent.
The seasonally unadjusted unemployment rate was 4.2 percent in February, compared with 3.5 percent in January and 4.5 percent a year earlier, today’s report showed.
The “jobless rate tends to rise in the first few months of a year as students graduate in February and look for jobs,” Song Seong Heon, director at Statistics Korea, told reporters in Gwacheon today. “The jobless rate will decline sooner or later as they find jobs. Other job data shows the labor market is still healthy.”
South Korea’s Finance Ministry said in a statement today that the economy will see steady employment increases next month as some companies face labor shortages, the number of startups increases and a state job program starts in March.
The central bank projected in December that new jobs will decline to 280,000 this year from 400,000 last year, with the jobless rate rising to 3.4 percent. The bank cut its growth forecast for this year to 3.7 percent from 4.6 percent estimated in July, compared with a 3.6 percent gain last year.
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