Bloomberg News

South Korea Adds Workers as Jobless Rate Unchanged

July 10, 2012

South Korea’s workforce expanded last month, with the unemployment rate unchanged from May as jobs increased in sectors including health care and education.

The jobless rate was at 3.2 percent in June, unchanged from May, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 10 economists was for a rate of 3.3 percent. The number of employed people increased by 365,000, or 1.5 percent, to 25.1 million last month from a year earlier.

South Korea’s government and central bank cut growth forecasts for this year citing a protracted European debt crisis even as domestic demand buoyed hiring. There’s a possibility policy makers will cut the benchmark rate a quarter percentage point to 3 percent tomorrow to boost confidence, Morgan Stanley said in a report this week.

“Going forward we see more downside risks to job growth due to external headwinds and a weak domestic economy,” Chang Jae Chul, an economist at Citigroup Global Markets Korea Securities in Seoul, said before the release. “However, the government recently announced that its top priority in the second half will be employment stability.”

The Bank of Korea will probably keep the benchmark rate at 3.25 percent for a 13th month tomorrow, according to 13 out of 15 economists surveyed by Bloomberg News. Two predict a 25 basis point cut.

The won slid for a third day yesterday in Seoul, falling 0.2 percent to 1143.75 per dollar, according to data compiled by Bloomberg. The benchmark Kospi stock index fell 0.4 percent.

The seasonally unadjusted jobless rate was at 3.2 percent in June, compared with 3.1 percent in May, today’s report showed.

South Korean manufacturers’ confidence fell to the lowest level in four months for July, according to a report last month. Gross domestic product may expand 3.3 percent this year, less than a December estimate of 3.7 percent, the Finance Ministry said June 28.

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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