S. Korea’s job growth cools sharply in May

South Korea’s labour market growth decelerated significantly in May, with only 80,000 new jobs created compared to 261,000 in April. This is the slowest pace since early 2021 during the post-pandemic recovery.

This slowdown in job creation comes despite faster-than-expected economic growth. South Korea’s export sector, particularly semiconductors and other tech products, is experiencing a boom due to high global demand.

However, these industries tend to be less labour-intensive compared to service industries, which make up a larger portion of the workforce.

The unemployment rate stayed steady at a low 2.8 per cent. This suggests continued monitoring by the government and Bank of Korea to determine whether the weak job growth is a temporary blip or a turning point.

The Bank of Korea is currently holding its benchmark interest rate at 3.5 per cent since the beginning of 2023, a level considered restrictive.

Attribution: Bloomberg