October labour market data
The unemployment rate in Korea remains very low, at just 2.8% in October, still not far off the multi-decade level of 2.5% recorded in August. But there are signs that the labour market is starting to cool. In particular, the surge in employment that accompanied the economic recovery post-covid is now losing momentum, with the number of jobs basically unchanged in October for the fifth consecutive month.
Given Korea's high rate of inflation in the services sector, as well as elevated consumer inflation expectations, it can be assumed that a cooling of the labour market is a critical aim of the BOK. With an unemployment rate below 3%, the bank can't relax yet. But with economic activity, particularly exports, clearly cooling too, there should be at least enough change happening in the economy to justify a BOK pivot away from 50bp interest rate rises.
In terms of the details, services employment, both in the public sector and out, is flat-lining. Manufacturing employment fell in October for the second consecutive month. Employment of people aged over 60 is still rising, which is probably helpful given Korea's problems of pensioner poverty.