Employment Increased in July... Concerns Over Job Market Rebound Due to '4th Wave of COVID-19' (Comprehensive)

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[Sejong=Asia Economy Reporter Son Seon-hee] As the fourth wave of COVID-19 intensifies, the employment market is once again taking a hit. Although overall indicators have improved compared to July last year, when employment conditions were at an all-time low, the increase in the number of employed persons has slowed for three consecutive months, and the employment rate of those in their 30s, a key demographic in the labor market, has declined. This suggests that the recovery trend barely maintained in the second quarter is showing signs of faltering again.

According to the 'July 2021 Employment Trends' released by Statistics Korea on the 11th, the total number of employed persons last month was 27.648 million, an increase of 542,000 compared to the same month last year. After an increase of 652,000 in April, the growth slowed to 619,000 in May and 582,000 in June, marking three consecutive months of reduced growth.

The overall employment rate rose by 0.8 percentage points to 61.3%, but among all age groups, only the employment rate for those in their 30s fell by 0.1 percentage points to 75.3%. The number of employed persons in their 30s has been decreasing for 17 consecutive months since March last year.

Jung Dong-myung, Director of the Social Statistics Bureau at Statistics Korea, stated, "In addition to population decline factors, the continued decrease in employment in the wholesale and retail sectors seems to be making it difficult for employment recovery among those in their 30s." Regarding the slowdown in the increase of employed persons, he explained, "The increase in online transactions and the strengthening of social distancing to level 4 have expanded the decline in wholesale and retail sectors and shifted accommodation and food services into a decreasing trend. Additionally, the unusually severe heatwave somewhat reduced the growth in the construction sector."

The overall increase in employed persons last year is analyzed as a base effect due to the very poor employment market in July last year. Nevertheless, the wholesale and retail sector decreased by 186,000, and the arts, sports, and leisure services sector decreased by 28,000 each. In particular, accommodation and food services, which are directly affected by strengthened social distancing, decreased by 12,000, marking a return to a declining trend after four months. The number of self-employed persons with employees stood at 1.274 million, setting a new all-time low for the second consecutive month.

The total number of unemployed persons was 920,000, down 218,000 compared to the same month a year ago. This is the lowest figure since July 2014 (914,000) for the same month. The unemployment rate fell by 0.8 percentage points to 3.2%.

The survey period was from the 11th to the 17th of last month, when social distancing level 4 was first applied in the metropolitan area. Considering that employment indicators tend to be lagging, the impact of the fourth wave of COVID-19 has not been fully reflected, raising concerns that employment conditions may worsen further this month.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on his social media on the same day, "Due to recent strengthened quarantine measures, the shock impact will be reflected with a time lag starting from August employment figures. We will do our best to minimize the impact of COVID-19 spread on the employment market and maintain the recovery trend as much as possible."

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