In September, South Korea experienced a decline in its unemployment rate, which fell to a noteworthy 2.1%. This figure reflects a decrease of 0.2 percentage points compared to the same month last year, as revealed by recent data published by Statistics Korea. The total number of unemployed individuals also witnessed a drop, reducing by 39,000 year-on-year, bringing the current count to 622,000. Concerns regarding the robustness of employment within the manufacturing sector and certain vital service industries have been voiced, largely attributed to the effects of the Chuseok holidays.
According to insights from ING Research, while vigilance is warranted, the fact that the unemployment rate remains comfortably below the 3% threshold and that the labor force participation rate is on the upswing suggests that the Bank of Korea is not likely to be overly worried about current labor market conditions. The economically active population was reported at 29.5 million, which indicates a growth of 105,000 or 0.4% from September of the previous year.
The labor force participation rate has remained stable at 64.6%. In terms of employment figures, the number of employed individuals increased by 144,000, now totaling 28.8 million, with the employment-to-population ratio also rising to 63.3%, marking an increase of 0.1 percentage points from the previous year. Nevertheless, it is important to note that the economically inactive population also saw an uptick, now totaling 16.1 million, which represents a rise of 54,000 or 0.3% year-on-year.
As for future monetary policy, ING anticipates that the central bank may adopt a 'pause' in its actions for some time and is likely to resume its cuts in interest rates come April 2025..