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South Korea's Unemployment Rate Steady in May Amid Cost Pressures

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South Korea's Unemployment Rate Steady in May Amid Cost Pressures

South Korea's unemployment rate held steady at 2.9% in May, unchanged from April, amid rising inflationary pressures.

On a year-over-year basis, the latest print was up 0.1 percentage point, according to the Ministry of Data and Statistics' Economically Active Population Survey published Thursday.

The jobless count in May climbed 25,000 to 878,000 from the prior month, and up 3% from 853,000 in May 2025.

The seasonally adjusted unemployment rate also steadied at 2.8% for a second straight month. The print was in line with the median forecast by analysts polled by Trading Economics.

The economically active population fell 815,000 from April to 29.998 million, and was down 14,000 year over year. The labor force participation rate dropped 0.4 percentage point to 65.2% from 64.9% in April, and was down 0.4 percentage point from a year earlier.

Total employed persons fell to 29.120 million from 28.961 million in April. Year over year, employment was down by 40,000, or 1%.

The employment-to-population ratio for those aged 15 and over rose to 63.3% in May from 63.0% in April, but was down 0.5 percentage points from a year prior. The ratio for those aged 15 to 64 edged up slightly to 70.2% from 70% in April.

The data comes amid rising price pressures in South Korea. Consumer prices rose 3.1% in May from a year earlier, the sharpest jump since March 2024, driven by petroleum product prices that were 24.2% up year over year.

Core inflation, which strips out volatile food and energy prices, accelerated to 2.5% from 2.2% in April, marking its fastest pace since February 2024.

The Bank of Korea left its benchmark interest rate unchanged at 2.50% at its latest policy meeting on May 28.

"Inflationary pressure has increased due to the Middle East war, growth has increased more than previously expected, supported by strong exports, and financial stability risks have still remained," the central bank said.

At the time, the BOK noted that employment continued its upward trend, and is expected to improve further, supported by a strong semiconductor sector.

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