Job additions slow in April amid higher borrowing rate, economic slowdown

A Statistics Korea official briefs about April's job market at the government complex in Sejong on Wednesday. [NEWS1]

Korea's job additions slowed in April after a brief rebound a month earlier, data showed Wednesday, amid higher borrowing costs and an economic slowdown, with most new positions taken by seniors.

The number of employed people came to 29.23 million in April, up around 354,000 from a year earlier, according to the data compiled by Statistics Korea. In April 2022, the country added 865,000 jobs on year.

Korea's monthly job additions had been slowing for nine consecutive months through February, before rebounding in March, when they rose 469,000 on year.

In April, Korea's jobless rate fell 0.2 percentage point on year to 2.8 percent.

"While the number of employed people continued to grow on the back of outdoor activities and rising demand for care-taking services, it grew at a smaller margin due to falling exports," an official from the agency told reporters.

The additions were mostly led by those aged 60 and above, with the number of positions rising 442,000 in the age group.

Excluding the seniors, the country's new job positions moved down 88,000 in the month.

The number of jobs for those in their 50s and 30s moved up 55,000 and 15,000, respectively. The job market remained challenging for younger Koreans, with the number of jobs for those in their 20s slipping 116,000.

By sector, the restaurant and accommodation businesses posted 171,000 additional jobs. The new positions at the health care and welfare industry also gained 148,000 over the period.

On the other hand, the number of jobs in the manufacturing segment plunged 97,000, reflecting the country's ailing exports. It marked the sharpest decline since a 110,000 drop tallied in December 2020.

Korea's overall outbound shipments fell 14.2 percent on year to $49.6 billion in April, as exports of semiconductors, the country's key export item, sank 41 percent on year.

"If chip exports do not recover, we believe it won't be easy to seek a turnaround in job creation in the manufacturing sector," the official added.

Those in the wholesale and retail sector fell 62,000 over the period, and those in the construction industry lost 31,000.

The Bank of Korea has been keeping its key rate at 3.5 percent since February as inflation appears to be easing and concerns are rising over an economic slowdown.

A hike in borrowing costs typically hampers employment as businesses and households cut their spending.

For the remainder of 2023, the government expects Korea's job market to remain "stable" on the back of recovering domestic consumption, along with the output in the service sector.

"However, uncertainties in the growth of job additions remain, due to the sluggish performance of the manufacturing industry, especially the IT segment, along with concerns over a resurgence of jitters in the global financial market," the finance ministry said in a separate report.

In 2022, Korea added an average of 816,000 jobs on year each month, driven by the post-pandemic recovery.

Yonhap