SEOUL (BLOOMBERG) – South Korea’s jobless rate hit a 10-year high in December as the country’s worst coronavirus outbreak forced businesses to slash hiring.
The unemployment rate reached 4.6 per cent last month, data from the statistical office showed on Wednesday (Jan 13). Economists had forecast the reading to be unchanged from November’s 4.1 per cent. The nation shed 628,000 jobs compared with the prior year, the largest losses since the start of the pandemic and a tenth straight month of declining employment.
The job losses and elevated unemployment rate highlight the impact of tightened social distancing rules as South Korea’s daily infection tally surged to beyond 1,000 last month. The shutdown of high-risk facilities such as karaoke parlors and a shortening of business hours for most shops have hurt service sector jobs.
To ease the pain, the government plans to give cash handouts worth 4.6 trillion won (S$5.56 billion) to millions of South Koreans before the Lunar New Year holiday next month and front-load its fiscal spending in the first half of the year.
South Korea’s ongoing recovery in exports has supported the broader economy, but the job market outlook depends on a successful containment of the latest virus wave and a loosening of restrictions. The number of new infections in South Korea have come down to around 500 a day recently.
