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Economy

South Korea unemployment rate surges to 10-year high in May

The biggest layoffs are still from small retailers, restaurants and lodging

Optimism about a swift rebound in consumption is still in doubt as the nation sees a resurgence of virus cases.    © Reuters

SEOUL (Reuters) -- South Korea's unemployment rate surged to the highest level in more than 10 years in May as businesses slashed hiring due to the coronavirus pandemic.

The seasonally adjusted unemployment rate climbed to 4.5% in May, from 3.8% in April, and was the highest since January 2010, data from the Statistics Korea showed on Wednesday.

The number of jobs declined 392,000 from a year ago, a smaller fall than a loss of 476,000 in April on-year.

The number of people who gave up looking for work increased for a third straight month in May, rising 39,000 from a year earlier.

"The biggest layoffs are still from small retailers, restaurants and lodging. There seems to be some improvements in restaurants but convenience stores and other 'mom-and-pop' stores still seem to be struggling," a Statistics Korea official said.

Vanishing jobs add to challenges for Asia's fourth largest economy at a time when policymakers are increasingly relying on domestic demand to shore up growth as exports tumble.

Optimism about a swift rebound in consumption is still in doubt as the nation sees a resurgence of virus cases from crowded spots like churches and call centres after early success in containing the outbreak.

As of Tuesday, the total number of infections is at 11,852, with 274 deaths, according to government data. 

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