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Economy

South Korean jobs rise at lowest rate in five months in June

Parliament under pressure to pass extra-budget bill designed to create more jobs

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A woman looks at recruiting information during a job fair in Seoul.   © Reuters

SEOUL -- South Korea added the fewest jobs in five months in June, official data showed Wednesday, making the job tougher for President Moon Jae-in's government which has prioritized job creation in its economic policy.

Statistics Korea said that 268.6 million people were employed in June, up 301,000 from a year ago. But the magnitude of increase was smaller than May's 375,000 and April's 424,000. The unemployment rate among youths aged between 15 and 29 also surged to 10.5% last month, up slightly from 10.3% a year ago. Overall, the unemployment rate inched up to 3.8% in June from 3.6% in May.

Moon vowed to become a "president of jobs" and has set up TV screens in his office that update him with jobs data. The human rights lawyer-turned-politician promised to create 810,000 jobs in the public sector during his five-year term.

To support the policy, the government last month submitted a $10 billion extra-budget bill to the National Assembly, but opposition parties are reluctant to pass it after Moon appointed ministers they opposed to. Lawmakers also raised questions about the extra-budget on worries that it burdened the national economy in the long term.

Economists say that the bill, if passed, will help boost the job market with no negative impact on the economy.

"The government will use the entire extra budget for job creation. The government will not issue any additional sovereign bonds as it utilizes extra tax revenue," said Kwon Young-sun, a senior economist at Nomura. "We expect the supplementary budget to be passed as [the] job markets remain weak and the extra budget will not add any government debt."

Moody's agreed with Kwon, saying the budget would help resolve the country's demographic concerns.

"We view the supplementary budget as the first tangible indication of the new administration's policy priorities, namely a credit-positive focus on countering rising unemployment rates, especially among the youth and tackling structural challenges stemming from a rapidly aging population," said the global credit ratings agency in a statement. "Measures that boost job creation and labor force participation can mitigate the economic effects of aging populations."

Last month, the finance ministry said the government will use the extra budget to hire 12,000 civil servants as well as creating 24,000 jobs in social services.

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