East Asia Econ

Korea – employment perks up

Employment bounced in September, providing more evidence of cycle bottoming. That shouldn't matter much for BOK thinking: in July it raised employment forecasts, and has expected recovery into 2026. I am sceptical that recovery runs far, but there are upside risks if business sentiment improves.

Paul Cavey

Oct 17, 2025 • 3 min read

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China – no change in underlying trends

Property is weak, manufacturing FAI has slowed, consumer spending on goods is soft, and price deflation isn't lifting. However, services consumption is better, and output of both goods and services is growing by more than 5%. The government likely still thinks the economy is muddling through.

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Last week, next week

My China theme – signs of stabilisation in the underlying cycle – seems anti-consensus, and, frankly, likely won't be supported by today's data. Elsewhere, the key issues this week will be what hints Takaichi's new government gives about the BOJ, and what confidence the BOK has for the 2026 outlook.

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East Asia Today

Korea's labour market looks better, though sustainable recovery likely needs stronger business confidence. Other data suggest an end to the sharp price falls for Korean auto exports to the US. Cars are unusual: in neither Korea nor the other economies have overall export prices been as volatile.