The labor market remained tough last month although the headline unemployment rate dipped for the first time in eight months, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The unemployment rate shed 0.03 percentage points to 5.76 percent last month, after job creation programs and improved industrial production increased opportunities, DGBAS Deputy Director Huang Jiann-jong (黃建中) told a media briefing.
The official, however, voiced concern about the seasonally adjusted figure, a gauge used to track long-term labor market performance, as it gained 0.03 percentage points to 5.77 percent, the highest since the beginning of the survey 31 year ago.
“The trend shows job losses are set to deteriorate in the summer when new college graduates join the market,” Huang said. “Hopefully, the deterioration will turn out to be slower than the last recession now that the worst of the slump is over.”
Unemployment rose 1.21 percentage points to 4.21 percent during the dot.com collapse in 2001, the last time Taiwan entered an economic recession.
Commenting on the latest unemployment data, Kevin Hsiao (蕭正義), head of UBS Wealth Management Research, said the labor market has yet to hit bottom because first-time job seekers will have difficulty landing jobs before there is a solid recovery.
Firms will remain conservative and shun cost expansion before the landscape brightens up, Hsiao said.
“Companies that need to hire new workers will favor experienced candidates,” the economist said. “I’m afraid the labor market will prove worse than expected given the severity of the economic woes.”
The number of unemployed stood at 625,000, down 5,000, the first fall since last September, the DGBAS report showed.
An extra 6,000 people lost jobs to business closures, while the agriculture sector added 6,000 to its payroll, the report said.
Cheng Cheng-mount (鄭貞茂), head economist at Citigroup Taiwan Inc, said job losses may have stabilized, but will climb to more than 6 percent in coming months. Cheng said that while manufacturers have improved equipment utilization, the financial sector continued to lay off employees to cope with the downturn.
Business closures have raised the number without a job by 219,000 in the past eight months, with the manufacturing industry contributing 98,000, the report said. Construction firms shed 37,000 workers, while retailers and wholesalers sacked another 21,000 employees.
The unemployment figure would exceed 6.16 percent in the absence of job creations programs, the report said.
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