South Korea’s unemployment rate fell to a four-month low last month as hiring in the service sector continued to increase.
The jobless rate was at 3.2 percent, compared with 3.4 percent in April, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 11 economists was 3.4 percent.
Risks to economic growth from Europe’s turmoil are increasing, Bank of Korea policy makers said in a statement after they kept borrowing costs unchanged for a 12th straight month in June. Spain’s benchmark borrowing costs climbed to a record yesterday, raising the specter of sovereign bailouts for the government in Madrid and then Italy that would stretch European Union finances to their limit.
“Korean producers are becoming more cautious, which may weaken output growth over the coming months,” Ronald Man, a Hong Kong-based analyst at HSBC Holdings Plc, said before the data was released. “Lower production will weigh on employment growth and pose a risk to overall domestic activity.”
Exports in Asia’s fourth largest economy contracted for the third consecutive month in May. Shipments to the European Union declined 16.4 percent from a year earlier in the first 20 days of May, according to government statistics.
At the same time, manufacturers’ confidence dropped from a nine-month high, with the index measuring expectations for June dropping to 86 from 90 in May, the Bank of Korea said in a statement in Seoul on May 29. A measure of expectations at non- manufacturing companies also declined to 83 from 85.
The won fell 0.4 percent to 1,170.55 per dollar in Seoul yesterday, according to data compiled by Bloomberg. The benchmark Kospi stock index declined 0.7 percent.
Finance minister Bahk Jae Wan told reporters on June 3 that the government will announce measures to support small companies and exporters at the end of this month, vowing to allocate additional state funds.
The seasonally unadjusted jobless rate was at 3.1 percent in May, compared with 3.5 percent in April, today’s report showed. -By Eunkyung Seo and Cynthia Kim