Jobless rate rises to 3.5% in June

By Kang Seung-woo

Staff reporter

The jobless rate in June rose by 0.3 percentage points to 3.5 percent in June from a month earlier, breaking the momentum of improvement in the previous four months.

The job market for young people aged between 19 and 29 was severely constrained with the unemployment rate for that group rising by 1.9 percentage points to 8.5 percent, according to Statistics Korea.

This bad news comes at a time when the government is expressing confidence in the strength of the ongoing recovery. The Bank of Korea raised its growth outlook to a robust 5.8 percent while raising its key rate for the first time in 17 months by 0.25 percentage points to 2.25 percent.

"Although the local economy is getting back on track faster than expected, companies are still concerned about lingering uncertainties. As a result, they have relied on experienced workers who can contribute to immediately increasing output," Lee Geun-tae, an economist at the LG Economic Research Institute, told The Korea Times.

He expects that this trend is likely to continue in the second half of the year. "There are worries about a double-dip recession and an expansion of the euro zone's debt crisis. The jobless rate among young job-seekers will stay at a high level," Lee said.

Overall unemployment peaked in January at 5 percent and has since slid for four consecutive months to 3.2 percent in May.

On a year-on-year basis, the number of employed went up 314,000 from a year ago. Even this figure is lower than the year-on-year growth of 586,000 registered in May.

The government plans to develop a comprehensive package to address the issue.

"We need to come up with effective solutions for youth unemployment because the job market is especially tight for them," Strategy and Finance Minister Yoon Jeung-hyun said.