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S.Korea’s job market continues to falter as manufacturers refrain from hiring

S.Korea’s job market continues to falter as manufacturers refrain from hiring

SEOUL, May 16 (Xinhua): South Korea’s labor market continued to falter last month as manufacturers, which supply decent jobs, refrained from hiring new employees, a government report showed Wednesday. The number of those employed came in at 26,868,000 in April, up 123,000 from a year earlier, according to Statistics Korea. The year-over-year growth hovered below 200,000 for three months from February, after posting a 334,000 increase in January. It marked the first time since the 2008 global financial crisis that the country’s job growth stayed below 200,000 for three months in a row. Manufacturers cut jobs on economic uncertainties such as reluctance among consumers to buy goods and services and the expected rate increase in the United States, which would lead to higher borrowing costs here. South Korean households struggled to repay debts, owed to financial institutions to purchase new home. It shrank private consumption, resulting in weaker corporate investment and lower recruitment. Major domestic shipbuilders have been under restructuring for loss-making businesses amid the soft global demand for new ships. The ongoing restructuring process caused job cuts and reduced facilities in the sector. Job creation among manufacturers fell 68,000 in April from a year earlier, ending the 10-month growth to March. The number of jobs in the wholesale and retail industry declined 61,000, while the figures in the lodging and food sector and the education service industry slumped 28,000 and 106,000, respectively, in April. The figures in the health, social welfare and public administration sectors increased last month, but job growth in the construction industry slowed down. The number of those unemployed topped 1 million at 1,161,000 in April, but it was down 6,000 from a year earlier. Jobless rate stood at 4.1 percent in April, down 0.1 percentage point from a year ago. The unemployment rate for the younger generation aged 15-29 declined 0.5 percentage point to 10.7 percent. The lower jobless rate was attributed to a one-off factor. The civic service examination was delayed by a month to May, leading to a fall in those who searched for jobs. The official unemployment rate refers to those who are immediately available for work but fail to get a job in the past four weeks despite efforts to actively seek a job. The so-called expanded unemployment rate for youths, which reflects labor market conditions more accurately, fell 0.2 percentage point over the year to 23.4 percent in April. The expanded jobless rate adds those who are discouraged to seek a job, those who work part-time against their will to work full-time and those who prepare to get a job after college graduation to the official jobless rate. To address the worsening labor market conditions, the government announced a supplementary budget plan worth 3.9 trillion won (3.7 billion U.S. dollars). It aimed at creating about 50,000 jobs for youths this year, while helping layoff workers in southern regions where shipbuilders and automakers are under the restructuring process. GM Korea, the local unit of U.S. automaker General Motors, announced plans to close down one of its five factories in southern South Korea, drawing a gloomy picture for employment in the car-related sectors. Meanwhile, the hiring rate stood at 60.9 percent in April, down 0.1 percentage point from a year earlier. The OECD-method employment rate for those aged 15-64 was unchanged at 66.6 percent. The hiring rate gauges the percentage of working people to the working-age population or those aged above 15. The employment rate is used as an alternative to jobless rate, and the government set its long-term target at 70 percent. The economically inactive population, or those aged above 15 minus the sum of those employed and unemployed, gained 134,000 from a year earlier to 16,093,000 in April. Those who were economically inactive for infant care, schooling and health problems, reduced last month, but the number of a so-called “take-a-rest” group increased. The group refers to those who replied that they took a rest during a job survey period. It is important as the group can include those who are unemployed and too discouraged to search for work for an extended period of time.

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