South Korea’s unemployment rate rose only modestly in March, but the workforce participation rate posted the steepest decline since 2009 as demand for labour plunged due to the coronavirus pandemic.
The participation rate - which measures those working or looking for work - was 62.2% in March, 0.9 percentage points lower than a year earlier, the fastest drop since April 2009 during the global financial crisis.
The March unemployment rate was 3.8%, the Statistics Korea data showed on Friday, higher than February’s 3.3% but within the seasonal fluctuation range.
The number of new jobs in South Korea was 26.6 million in March, 195,000 fewer than a year earlier, marking the first on-year decline since 2010.
“The workforce may shrink further in April, as it will be a lot worse for exports,” said Lee Sang-jae, an analyst at Eugene Investment & Securities.
Asia’s fourth-largest economy could contract this year as global demand for Korean goods falls, while the number in low-paying jobs across the construction and retail sectors affected by the slowdown is expected to increase.