South Korea’s Unemployment Rate Unexpectedly Edges Up in May

(Bloomberg) -- South Korea’s unemployment rate rose in May for the first time this year, as more people looked for jobs amid an economic recovery from the pandemic.

The jobless rate increased to 3.8% from 3.7% the previous month, the statistics office reported Wednesday. Analysts had forecast an improvement to 3.6%. The economy added 619,000 jobs from a year earlier, a third month of gains.

While consumer activity is picking up and exports are surging, the virus’ continued spread has capped the consumption recovery. The job market could receive support if another extra budget is passed to support vulnerable industries. Finance Minister Hong Nam-ki this month said the government was considering a sixth supplementary spending package to shore up businesses amid the pandemic.

A separate report from the central bank showed the economy grew 1.7% in the first quarter from the previous three months, stronger than an initial estimate.

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The jobs data showed the retail and wholesale sectors continued to be hit hardest, shedding 136,000 positions. Gains at hotels and restaurants slowed to 4,000 in May from 61,000 the previous month. The construction sector added 132,000 jobs while manufacturing gained 19,000.

The government’s job creation efforts helped add 83,000 workers in public service, defense and social security. Jobs in health care and welfare service increased by 241,000 in May.

The total number of employed people rose to 27.3 million on a seasonally-adjusted basis, still below the pre-pandemic peak in February 2020.

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