Korea loses 40,000 jobs in May, first drop since 2024 martial law bid

Job-seekers look around at a job fair for positions in the environment industry, held at aT center in southern Seoul, May 19. Yonhap

Korea lost 40,000 jobs in May from a year earlier, government data showed Thursday, marking the first decline in 17 months as the impact of the prolonged Middle East war weighed on the manufacturing sector.

The number of employed people came to 29.12 million in May, compared with 29.16 million a year earlier, according to data from the Ministry of Data and Statistics.

It marked the first decrease since December 2024, when the number of jobs fell by 52,000 following former President Yoon Suk Yeol's botched martial law bid, which dealt a blow to the Korean economy.

Job growth had remained in the 200,000 range in February and March before slowing to 74,000 in April.

"Normally, factors such as oil prices are immediately reflected in economic data," Bin Hyun-joon, a senior statistics official, said during a briefing.

"(The Middle East war) has caused supply chain disruptions and other difficulties for businesses, and it took some time for those effects to be reflected in the job market," Bin added.

The country's jobless rate came to 2.9 percent last month, up 0.1 percentage point from a year earlier. The number of unemployed people totaled 878,000 in May, up 25,000 over the period.

The employment rate for Koreans aged 15 to 64 came to 70.2 percent in May, down 0.3 percentage point from a year earlier. That for seniors aged 65 and older, on the other hand, rose 0.5 percentage point to 41.6 percent.

The employment rate for people aged 15 to 29 came to 43.8 percent, down 2.4 percentage points from a year earlier.

"The recent hiring trend, in which companies prefer experienced candidates and have scaled back large-scale recruitment, has led to a decline in employment among people in their 20s," Bin said.

By sector, the number of jobs in the health and social welfare services sector increased by 212,000 from a year earlier, while those in the arts, sports and recreation-related services sector rose by 44,000.

Other major gainers included the transportation and logistics sector, which added 36,000 jobs.

The data ministry said the accommodation and food service industry also added 20,000 jobs, marking the first increase in seven months, on the back of the improved consumer sentiment.

On the other hand, the manufacturing sector lost 140,000 jobs in May from a year earlier, while the agriculture, forestry and fisheries sector shed 121,000 jobs.

Jobs in the manufacturing sector fell from a year earlier for the 23rd consecutive month. The latest decline marked the steepest drop since a fall of 151,000 in February 2019.

"The number of jobs in the automobile and plastics industries lost ground. While the recent increase in exports has been led by chips, the industry does not account for a significant portion of the job market," Bin said.

The science and technology services industry also lost 89,000 jobs.

The number of economically inactive people rose by 264,000 from a year earlier. The number of people reporting that they were not working and simply resting increased by 47,000 to 2.43 million, according to the latest findings.

The government, meanwhile, vowed to take proactive efforts to address the impact of the Middle East war on the job market.

"Uncertainties have persisted in the job market due to the prolonged Middle East war, which has led to rising raw material costs and supply disruptions," Finance Minister Koo Yun-cheol said during a meeting with employment-related ministers.

"The government intends to remain vigilant and take proactive steps amid lingering uncertainties."