May Employment Increased by Only 80,000... Youth Unemployment Rate Up by 0.9%P (Comprehensive)

Statistics Korea May Employment Trends
Smallest Increase in Number of Employed in 39 Months

Last month, the number of employed people increased by only 80,000, marking the smallest growth in 39 months. This was mainly due to a noticeable decrease in employment in wholesale and retail trade as well as construction industries. The unemployment rate rose by 0.3 percentage points year-on-year to 3.0%. In particular, the youth unemployment rate increased by 0.9 percentage points to 6.7%.

According to the 'May Employment Trends' released by Statistics Korea on the 12th, the number of employed people aged 15 and over last month was 28,915,000, an increase of 80,000 compared to the same month last year. This is the smallest increase in 39 months since February 2021, when employment decreased by 473,000. The employment growth had returned to an upward trend in April after three months, recovering to the 200,000 range, but fell below 100,000 again after just one month. Seounju, Director of the Social Statistics Bureau at Statistics Korea, explained, “During this year’s employment survey period, unlike the previous year, the Buddha’s Birthday holiday was included, and due to the base effect from the continuous large increase in jobs since COVID-19, the number of employed people decreased.”

The decrease in the number of employed people was particularly noticeable in wholesale and retail trade. Employment in wholesale and retail trade decreased by 73,000, the largest drop since February last year (-76,000). In April, the decrease was limited to 39,000. Employment also declined in business facilities management, business support and rental services (-64,000), and construction (-47,000). Director Seo analyzed, “In April, employment increased in agriculture, construction was not bad, and manufacturing improved significantly. Compared to that, last month, employment in agriculture worsened and construction turned negative.”

Employment in agriculture, forestry, and fisheries increased by 50,000 in April but turned to a decrease of 34,000 last month. Manufacturing employment, which increased by 100,000 in April due to strong exports and semiconductor market recovery, rose by only 38,000 last month. On the other hand, due to increased demand for care services and domestic tourist inflow, employment in health and social welfare services increased by 94,000, and employment in accommodation and food services also rose by 80,000.

Kim Byunghwan, First Vice Minister of the Ministry of Economy and Finance, said at the job task force (TF) meeting that day, “The reduced increase in employment in May was influenced by temporary factors such as holidays included in the employment survey period and worsening weather conditions, including an increase in rainy days.” The number of rainy days during the survey week increased from 1.5 days in May last year to 2.6 days this year, and the average temperature dropped from 20.1°C to 17.3°C. At the same time, the decrease in employment in wholesale and retail trade and construction was also identified as a factor reducing the employment growth.”

Youth employment (ages 15?29) decreased by 173,000. The number of employed youth has been declining for 19 consecutive months since November 2022. The decrease was the largest in 40 months since January 2021 (-314,000). Director Seo said, “Youth employment continues to decline, heavily affected by population decrease,” adding, “There was an impact from a 2.9% decrease in the youth population.” He also added, “There is a trend in the labor market to prioritize hiring experienced workers, which also contributed to the decrease in youth employment.”

The employment rate (aged 15 and over) was 63.5%, the same as a year ago. The employment rate for ages 15?64, the OECD comparison standard, was 70.0%, up 0.1 percentage points year-on-year. The youth employment rate (ages 15?29) was 46.9%, down 0.7 percentage points compared to the same month last year. Meanwhile, employment among those aged 60 and over increased by 265,000, leading the growth. Employment among people in their 30s increased by 74,000, and those in their 50s by 27,000.

The unemployment rate rose to 3.0%, up 0.3 percentage points year-on-year. The number of unemployed people was 884,000, an increase of 97,000 (12.3%) compared to the same month last year. This marks seven consecutive months of increase since November last year. By age group, the number of unemployed increased among those aged 60 and over (26,000) and those in their 20s (21,000). The youth unemployment rate rose to 6.7%, up 0.9 percentage points.

Vice Minister Kim said, “Domestic demand indicators such as average daily export value, card approval amount, and the number of inbound overseas travelers in June show improvement, which will positively affect future employment.” He added, “We plan to closely monitor employment situations by industry and group, and strengthen customized job support efforts for vulnerable sectors in cooperation with related ministries, centered on the job task force.”