S. Korea's jobless rate drops to 3.7 pct in July

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By Koh Byung-joon
SEOUL, Aug. 12 (Yonhap) -- South Korea's unemployment rate fell to the lowest
level in six months in July amid growing signs a protracted economic slump might
be nearing an end, a government report showed Wednesday.
The jobless rate stood at 3.7 percent last month, down from 3.9 percent the
previous month, according to the report by the National Statistical Office. It
was lower than a median forecast of 3.9 percent in a recent poll by Yonhap
Infomax, the financial news arm of Yonhap News Agency.
The economy, however, shed 76,000 jobs last month compared with a year earlier,
turning around from June's year-on-year job growth, the first in six months, the
report showed.
"The reason for the July job loss owes partly to a decline in employment in
manufacturing, wholesale and retail sectors amid weak exports, coupled with a
one-off factor such as a reduction in the construction sector affected by
unfavorable weather conditions," Jeong In-sook, head of the NSO's employment
statistics division, told reporters.
"Still, we can say that the worst for the labor market seems to have ended, also
evidenced by other major economic indicators including industrial output," she
added.
South Korea has been losing jobs this year as companies trim their recruitment
for fear that business conditions could deteriorate. In May, job losses rose to a
10-year high of 219,000 but thanks to government efforts to create jobs in the
public sector by providing temporary work, around 4,000 jobs were added in June.
July's labor data came amid cautious optimism that the worst of the economic
downturn might be over or nearing an end, amid improving major indicators.
Government figures showed that industrial output expanded for the sixth straight
month in June, while consumption and corporate investment are showing signs of a
marked pickup.
According to the nation's central bank, Asia's fourth-largest economy expanded a
better-than-expected 2.3 percent in the second quarter from three months earlier
after inching up 0.1 percent in the first quarter. During the last quarter of
2008, the economy plunged 5.1 percent.
The state-run think tank Korea Development Institute struck an upbeat note in an
earlier report, saying that the Korean economy is "bottoming out" from the
recessionary phase caused by the global financial crisis.
Policymakers, however, remained cautious, saying that exports and domestic demand
are still weak, which they worry will weigh on a full-swing economic rebound.
On Tuesday, the Bank of Korea, South Korea's central bank, kept its key interest
rate at a low of 2 percent for a sixth straight month.
The job losses, however, come despite the government's intensifying efforts to
create working positions for people vulnerable to a protracted economic slump.
The government announced in May that it will provide around 250,000 temporary
jobs in the public sector in a bid to unfreeze the tightened labor market.
According to the NSO report, the number of employed people stood at 23.82 million
as of the end of July. The seasonally-adjusted unemployment rate fell to 3.8
percent the lowest in three months compared with 4 percent in June.
South Korea's economy is expected to shrink 1.5 percent this year, the first
contraction in more than a decade.
kokobj@yna.co.kr
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