South Korea’s February unemployment spikes – highest since 2010

SEOUL – South Korea’s February unemployment spike was more than just a seasonal stress, according to the French banking group Natixis, pointing out that the unemployment rate rose to 4.1% in February from 3.5% in January – and was the highest since 2010

All sectors lost jobs in February except for business and personal services. The number of unemployed rose to 1.3 million, up from 1 million in January.

“Some of this is due seasonal factors such as the lunar new year as temporary workers in retail and transportation sectors tend to lose jobs after public holidays,” Natixis says. “But fundamentally, this reflects the cracks in Korea’s labour market conditions where the still-low unemployment rate masks high underutilisation and part-time worker rates.

“Success of labour market reforms is vital to lift wages and rebalance the economy to offset drags from debt and demographics. The Korean government needs to address three labour market challenges, a) An un-dynamic SME sector; b) Low service productivity; and c) Labour market rigidity,” Natixis says.  www.natixis.com (ATI).