SEOUL, Aug. 10 (Korea Bizwire) — South Korea reported job additions for the 17th straight month in July, but the pace of job growth slowed from the previous month amid heightened economic uncertainty, data showed Wednesday.
The number of employed people came to 28.48 million last month, up 826,000 from a year earlier, according to the data compiled by Statistics Korea.
The July figure was the largest for any July since 2000, when 1.03 million jobs were added from a year ago.
But the pace of job growth slowed for the second straight month. The July reading was lower than the on-year increase of 935,000 in May and 841,000 in June.
South Korea’s job market has markedly improved after taking a hit from the COVID-19 pandemic. But the outlook for job recovery remains uncertain amid the economic slowdown.
The South Korean economy faces the risk of stagflation, a mix of slowing growth and high inflation, as external economic uncertainty has increased from the ongoing war between Russia and Ukraine, as well as global monetary tightening.
The government said rate hikes, a flare-up in COVID-19 virus cases and weak business sentiment are expected to weigh on the job market in the second half of this year.
“Next year, the pace of job growth will likely further slow down, given the base effect and a planned cut in state-arranged jobs for senior citizens,” the finance ministry said.
Jobs data pointed to overall improvements in the labor market, but more than half of the July job additions were led by a rise in state-arranged short-term jobs for older adults.
The employment rate of people aged 15 and older rose 1.6 percentage points on-year to 62.9 percent in July, the highest for any July since the statistics agency began compiling related data in 1982.
The number of economically inactive people — those who are neither working nor actively seeking jobs and people outside the labor force — reached 15.95 million in July, down 575,000 from a year ago. It marked the 17th consecutive month of an on-year fall.
The country’s jobless rate fell 0.3 percentage point on-year to 2.9 percent last month. The number of unemployed people fell 84,000 to 836,000.
By sector, the manufacturing sector, the backbone of the economy, reported the largest job growth in nearly seven years. In July, 176,000 job posts were added on-year, marking the ninth straight month of increase.
The accommodation and restaurant business reported job growth for the third straight month in July as outdoor activities increased due to the lifting of most COVID-19 restrictions.
The sector, hit hard by the COVID-19 pandemic, saw the number of employed people increase 54,000 on-year.
By age, job posts for those aged 60 and older grew the most, with 479,000 new positions on-year.
The number of permanent workers grew 895,000 on-year last month. But the number of temporary workers fell for the second straight month, with a fall of 52,000. That of day laborers decreased 77,000, marking the 15th straight month of decline.
In the latest forecast made in May, the Bank of Korea (BOK) forecast the number of employed people will increase 580,000 this year, larger than the on-year rise of 370,000 last year.
The government expected the number of employed people to grow some 600,000 in 2022.
The finance ministry lowered its 2022 growth outlook for Asia’s fourth-largest economy to 2.6 percent, while sharply raising its inflation estimate to a 14-year high of 4.7 percent.
The BOK’s 2022 economic growth and inflation projections stand at 2.7 percent and 4.5 percent, respectively.