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☆ South Korea's Sept unemployment rate rises from record low
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +1 min

SEOUL, Oct 14 (Reuters) - South Korea's unemployment rate rose in September from a record low set in August while employment fell slightly, data showed on Friday, a sign that a year-long policy tightening campaign and slowing exports have begun to cool the economy. The country's seasonally adjusted unemployment rate rebounded to 2.8% in September from 2.5% in August, which was the lowest since the data series began in June 1999. However, it was still far below an average of 3.6% set in all of 2021. The employment rate edged down 0.1 percentage point to 62.2% in September from August after adjusting for seasonal factors, the Statistics Korea data showed. Bank of Korea Governor Rhee Chang-yong said after the rate decision on Wednesday that Asia's fourth-largest economy has begun softening, although economists expect it to raise the rate further in the coming months.

Joo and Shin voted for a smaller hike in the rate, Rhee said in news conference, but did not elaborate on their views. Twenty-three of 26 analysts expected the bank to go for a half-point hike in a Reuters poll, while the remaining three expected a quarter-point hike. The median forecast in the poll showed the BOK's base rate going to 3.25% by year-end and then peaking at 3.50% in the first quarter of 2023. Almost half of respondents in the Reuters poll expected the base rate to reaching 3.75% in the first quarter of next year. After Wednesday's rate hike, the Korea Federation of Small- to Medium-sized Enterprises expressed "serious concern" about higher rates.

The Bank of Korea (BOK) raised its benchmark policy rate (KROCRT=ECI) by 50 basis points to 3.00% on Wednesday, bringing total rates hike since August last year to 250 basis points. Twenty-three of 26 analysts expected the bank to go for a half-point hike in a Reuters poll, while the remaining three expected a quarter-point hike. "The 50 bp hike today was the BOK's response to the sinking won, it seems." South Korea's three-year treasury bond futures fell after the BOK's statement on the decision. The median forecast in the poll showed the BOK's base rate going to 3.25% by year-end and then peaking at 3.50% in the first quarter of 2023.

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