2 Pieces of Economic Good News: Defaults, Unemployment Both Show Declines in April

The government announced Thursday two encouraging economic indicators. The number of unemployed workers, which had been over 1 million in February and March, declined to 848,000 in April. And the number of companies going into default was the least in nearly 10 years.

According to the National Statistical Office, the jobless fell by 187,000 people and the unemployment rate declined a full percentage point to 3.8 percent from March to April. "After the season of farming and with construction work resumed, the number of people working in those sectors has increased," said Sun Ju-dae, an official at the office.

The seasonally adjusted unemployment rate also declined in April from March by 0.4 percentage point. It also fell from a year ago by 0.3 percentage point. "Temporary employment in wholesale and retail has increased," Mr. Sun said. "The government's policy also contributed to the decline in the unemployment rate."

The Bank of Korea said Thursday that 453 firms went into default in April, down from 503 companies in the same month of last year and down from 496 firms in March. It is the least since June 1999, when the figure was 413.

"Small and medium-size companies have improved their finances since the 1997-98 foreign exchange crisis," said a central bank official. "And banks have recently increased loans to the firms, since interest rates have declined."

The official also forecast that the number of companies going into default would not increase for a while, unless a large conglomerate should go bankrupt, causing chain-reaction defaults.

by Cheong Chul-gun