Slump at factories leads to 3.8% unemployment

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Slump at factories leads to 3.8% unemployment

Korea’s jobless rate rose slightly in January from a year earlier as the backbone manufacturing sector remained in a deep slump, government data showed Wednesday.

The unemployment rate in Asia’s fourth-largest economy stood at 3.8 percent last month, edging up 0.1 percentage point from the same month last year, according to the report compiled by Statistics Korea.

From a month earlier, the rate also jumped 0.6 percentage point from 3.2 percent.

The number of employed people stood at 25.69 million in January, up 243,000 from a year earlier, the least on-year gain in 11 months.

The unemployment rate for young people, aged between 15 and 29, reached 8.6 percent last month, down sharply from 9.5 percent tallied a year earlier but up slightly from the previous month’s 8.4 percent.’

The statistics office attributed the decline in the number of new monthly employments to the sluggish performance of the manufacturing sector, which accounts for a quarter of the country’s total hiring.

The number of new jobs offered by manufacturing businesses fell by 16,000 in December from a year earlier, marking the largest on-year drop in 7 1/2 years. It also extended its losing streak to seven straight months.

Local manufacturers newly hired around 150,000 people every month throughout 2015, with the number peaking at 191,000 in October. But the figure plunged to 20,000 in June last year and posted negative growth in the following month for the first time in 49 months.

The agency said the downbeat trend is largely led by industrywide efforts to reshape ailing sectors like shipbuilding, shipping and steelmaking, which have been suffering huge losses stemming from low oil prices, resulting in massive layoffs.

Also, a steady decline in exports last year has been weighing heavily on the manufacturing sector’s employment.

South Korea’s outbound shipments fell 8 percent in 2015 and 5.9 percent in 2016, due largely to a decline in global trade.

“A sharp drop in demand for employment has continued to deal a heavy blow to the job market since the second half of last year,” said Bin Hyun-joon, director for the employment statistics division at Statistics Korea.

“The number of employments by the manufacturing sector will likely remain in negative terrain for a while as it is hard to make a rebound amid contracted demand and a bad job market.” YONHAP

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