South Korea’s Jobless Rate Hits 10-Year High as Virus Surges

(Bloomberg) -- South Korea’s jobless rate hit a 10-year high in December as the country’s worst coronavirus outbreak forced businesses to slash hiring.

The unemployment rate jumped to 4.6% last month, the highest since January 2010, the statistical office reported Wednesday. Economists had forecast a reading unchanged from November’s 4.1%.

The nation shed 628,000 jobs compared with the prior year, the largest losses since the start of the pandemic and a tenth straight month of declining employment.

The job losses and elevated unemployment rate highlight the impact of tightened social distancing rules as Korea’s daily infection tally surged to beyond 1,000 last month. The shutdown of high-risk facilities such as karaoke parlors and a shortening of business hours for most shops have hurt service sector jobs.

The restaurant and hotel sector sector was hit hardest with 313,000 job losses, roughly twice those of the previous month. The manufacturing industry shed 110,000 workers. Construction continued to see improving employment, adding 23,000 workers.

BOK Frets Over Uneven Recovery as South Korea Waits for Vaccine

Korea’s ongoing recovery in exports has supported the broader economy, but the job market outlook depends on a successful containment of the latest virus wave and a loosening of restrictions. The number of new infections in South Korea have come down to around 500 a day recently.

To aid the economy, the government plans to give cash handouts worth 4.6 trillion won ($4.2 billion) to millions of South Koreans before next month’s Lunar New Year holiday and front-load fiscal spending in the first half of the year.

(Adds industry breakdown on job losses and gains.)