Youth Employment Falls for 47th Straight Month Despite 83.5% Surge in Exports
Despite a sharp surge in exports, youth employment has declined for the 47th consecutive month, showing that the economic recovery has yet to translate into job creation. At its October 'Recent Economic Trends' (Green Book) report released Tuesday at the Government Complex Sejong, the Ministry of Economy and Finance assessed that the Korean economy "continues on a solid recovery track."
Exports are the engine driving the recovery. Last month, exports grew 83.5% year-on-year, fueled by increased shipments of semiconductors, computers and cosmetics. Daily average exports rose 104.9% to $5.63 billion. The momentum has continued this month. According to the ministry, exports in the first 10 days of this month rose 102% year-on-year to $26.1 billion, with semiconductor exports reaching $11.2 billion, a record high.
The government also views investment favorably. Facility investment in the second quarter of this year grew 0.2% from the previous quarter, rising for two consecutive quarters after a 1.6% drop in the fourth quarter of last year was followed by a 6.6% rebound in the first quarter. On a year-on-year basis, investment rose 4.4% in the first quarter and 6.3% in the second.
Domestic demand, however, remained sluggish. All-industry production fell 1.3% from the previous month in August, while retail sales and mining and manufacturing output each declined 1.8% and 4.8%. The cyclical component of the coincident composite index rose 0.5 points, but that of the leading composite index fell 0.1 points.
Employment indicators are also weak. September employment data released the same day by Statistics Korea showed total employment rose 113,000, maintaining growth in the 100,000s for the third straight month, while manufacturing employment added 16,000, turning positive for the first time in 27 months. In contrast, employment among those aged 15 to 29 fell by 147,000, marking the 47th straight monthly decline. The youth employment rate dropped 1.1 percentage points to 44.0%, falling for the 29th consecutive month, while the youth unemployment rate rose 0.6 points to 5.4%. Even when the age range is widened to 15 to 34, employment fell by 98,000 and the employment rate dropped 0.4 percentage points.
Consumer price growth last month came in at 2.9%, down from 3.1% in September, but remained above the 2% inflation target. Higher petroleum prices, up 14.8% year-on-year, were a major factor, and core inflation excluding food and energy rose 2.8%.
The Ministry of Economy and Finance analyzed that "livelihood burdens persist amid rising inflationary pressure from high oil prices and difficult employment conditions for vulnerable groups, against a backdrop of heightened uncertainty from the Middle East conflict." First Vice Finance Minister Kwon Dae-young stressed at a joint interagency jobs task force meeting held at the Government Complex Seoul on Tuesday that "the fruits of economic growth must translate into tangible benefits in people's lives."
The government said it will swiftly draw up plans for a national jobs project encompassing private- and public-sector employment and ample training opportunities, and will actively develop new policies. It plans to prepare response measures centering on industries with weak employment, such as construction and agriculture and fisheries, focusing on boosting industrial vitality, workforce development, expanding jobs and startups, and improving working conditions.
