S. Korea's jobless rate falls to 3% in Aug

SEOUL - South Korea's jobless rate fell to 3.0 percent last month, but job creation reduced sharply, indicating that those who gave up job-seeking efforts were increasing, a government report showed Wednesday.

The unemployment rate stood at 3.0 percent in August, down 0.1 percentage point from a month earlier, according to Statistics Korea. From a year before, the rate was unchanged.

After peaking at 4.2 percent in February, the jobless rate has trended down to 3.0 percent last month that is nearly at full employment level. The August figure was the lowest this year.

However, the jobless rate was not expected to keep its downward trend given the fact that the global economic slowdown stemming from the European fiscal crisis was hurting the country's exports, which account for around half of the economy.

"Korea's unemployment rate has trended down since the February spike. Demand for workers remains firm even as the economy is slowing. But, this looks unsustainable. The jobless rate is unlikely to go much lower. We may see overall employment fall toward the end of 2012," Moody's Analytics said in a report before the data release.

The unemployment rate gauges the percent of people unemployed who actively sought jobs over the past four weeks to the economically active population, or the sum of people employed and those unemployed.

The number of people unemployed, who failed to land work despite job-hunting efforts, reached 764,000 last month, up 2,000 from a year earlier.

The jobless rate among those aged between 15 and 29 came in at 6.4 percent in July, up 0.1 percentage point from a year before.

Meanwhile, the total number of people employed reached 24.86 million in August, up 364,000 from a year earlier. The on-year growth was sharply down from a 470,000 expansion tallied in July.

The hiring rate, which gauges the percent of working people to working age population, or those aged 15 and over, came in at 59.7 percent in August, down 0.6 percentage point from the previous month. The employment rate is an alternative measure to the jobless rate for assessing labor market conditions.

By industry, the health and social welfare industry created 92,000 jobs last month, with the science and technology service industry employing 89,000 workers. The manufacturing sector added 80,000 positions, and the wholesale and retail service industry hired 65,000 workers.

The number of people employed as a regular worker increased 494,000 in August from a year before, but temporary workers declined 174,000 over the same period. The number of workers hired on a daily basis retreated 96,000 last month.

The number of those working less than 36 hours per week reached 7,275,000 in August, up 18.1 percent from a year earlier. Among them, involuntary part-time workers came in at 355,000, down 2.5 percent from a year before.

The involuntary part-time workers are those who want to work full time and are available to do so, but they are employed part time as their working hours are cut back involuntarily or they are unable to find a full time job.

In August, people working less than 18 hours per week came in at 1,433,000, among which those working part time for economic reasons reached 129,000.

The economically inactive population, or people aged over 15 minus the economically active population, expanded 180,000 on-year to 16,042,000 in August amid growth in people who did not work due to housework and old age.

The number of people who prepare for job-searching increased 9,000 on-year to 569,000 in August, while the number of people too discouraged to continue their search for job grew 15,000 to 225,000, the first rebound in 13 months.

Discouraged workers are those who want to work and are available to do so, but they failed to get the job due to tough labor market conditions. They are those who looked for a job sometime in the prior 12 months.

The so-called "take-a-rest" item, or those who replied that they took a rest during the job survey, reached 1,549,000 in August, down 5.1 percent from a year earlier. The item is important as it can include those who are unemployed and too discouraged to search for work for a long time.