Unemployment rate climbs to 3.5% in June

The unemployment rate grew for the first time in five months in June, especially highly among youth, a government report said Wednesday.　

The pace of job market growth was slow for five months, adding to growing fears about Korea’s capacity for employment with rising interest rates. The Bank of Korea last week joined its Asian peers in raising the benchmark interest rate by 0.25 percentage point to 2.25 percent a year. 

The jobless rate rose to 3.5 percent from May’s 3.2 percent, the lowest level since October 2008, Statistics Korea said. 

The number of employed in June was up 314,000 from a year ago, reaching 24.28 million. Expanded recruitment in manufacturing and construction continued, where more than 100,000 jobs were created each month for the past quarter. 

“The private sector is leading the job market recovery,” Finance Minister Yoon Jeung Hyun said at a ministerial meeting. Korea in 2009 lost 72,000 jobs but the government expects to add 300,000 jobs this year.

Job openings in the public sector fell by 141,000 in June from a year earlier with the scale back of employment programs led by the government. 

“We attribute the rise of jobless rate to part-time job losses at education, wholesale and public administrations,” said an official at the Finance Ministry.