South Korea’s jobless rate rises modestly in August, BoK likely to tweak monetary policy

Unemployment rate in South Korea rose modestly during the month of August, compared to a year earlier period with the unemployment rate for young adults still remaining high amid a prolonged economic slump. However, a rising trend of unemployment will likely force the Bank of Korea to tweak its interest rate decision in its next monetary policy decision.

The unemployment rate in Asia's fourth-largest economy stood at 3.6 percent last month, compared with 3.5 percent tallied in July, data compiled by Statistics Korea showed Tuesday. The number of employed people stood at 26.5 million in August, up 387,000 from a year earlier, with the monthly gain expanding sharply from the previous month's 298,000.

The unemployment rate for young people, aged between 15 and 29, reached 9.3 percent last month, up slightly from July's 9.2 percent. The statistics agency further said the monthly gain in employment is led by the construction, wholesale and retail sectors.

The unemployment rate in Ulsan, where the country's No. 1 shipyard Hyundai Heavy Industries is headquartered, soared 1.2 percentage points on-year to a 16 year-high of 4 percent. Further, the number of employees at manufacturing companies fell by 74,000 last month from a year earlier, marking the largest on-year drop since April 2012, when the comparable figure was 80,000.

Meanwhile, the Ministry of Finance has announced that it will speed up the execution of the planned government spending as a supplementary budget worth KRW11 trillion taht was approved by the parliamentary last month.