Korea’s Unemployment Rate Surprise Fall Amid Virus Resurgence

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Korea’s Unemployment Rate Surprise Fall Amid Virus Resurgence
Credit: © Reuters.

(Bloomberg) -- South Korea’s unemployment rate unexpectedly fell for a third month in August, even as a resurgence of the virus forced the government to tighten social distancing rules.

The unemployment rate fell to 3.2% in August from 4.2% in the previous month, data from the statistical office showed Wednesday. Economists forecast unemployment holding at 4.2%. However, the nation shed 274,000 jobs -- a sixth straight month of declining employment.

Despite the jobless rate improvement, South Korea’s job market remains on weak footings. The outlook for hiring has deteriorated since daily virus caseloads surged last month, prompting the government to place limits on social activities that have hurt some service industries.

The virus resurgence prompted the central bank to cut its growth forecast and it now expects employment to fall over the year. The government is pushing for a fourth extra budget, to aid workers and businesses that lost income due to the latest restrictions.

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