Hong Kong's Jobless Rate Hits A 15-year High

The local unemployment rate has taken another turn for the worse amid Covid-19, climbing to 6.2 percent in the three months ending June. That's the highest figure in more than 15 years.

The jobless rate from March to May was 5.9 percent.

The underemployment rate also worsened, rising from 3.5 percent to 3.7 percent.

The government says the jobless situation in the April-to-June period worsened across almost all trades, especially in the decoration, repair and maintenance for buildings sector; import and export trade sector; and warehousing and support activities for transportation sector.

The total number of people out of work rose from 230,400 to 240,700.

The Secretary for Labour and Welfare, Law Chi-kwong said, "The labour market continued to deteriorate for the second quarter of 2020 as a whole, but the pressure faced by the labour market showed signs of easing towards the end of the quarter as the local epidemic situation abated in May and June."

He also said the launch of the government's Employment Support Scheme, which is aimed at saving jobs amid the coronavirus outbreak, also helped to ease the pressure on the job market.

But ING Wholesale Banking's Greater China chief economist Iris Pang says the latest figures were worse than expected.

She also warned of the road ahead after the job-saving scheme ends.

"Some of the employees have been holding on to their jobs mainly because of the scheme. The Hong Kong government may need to extend the employment scheme for a few months, so that there would not be a jump in unemployment when the scheme ends, when Covid is still lingering on," she said.

The latest figures did not cover July, which saw the third wave of Covid infections here in Hong Kong.

Law said the outbreaks in parts of the world and a renewed surge in local coronavirus cases showed that the economic outlook is still subject to huge uncertainties. The labour chief said the job market here will depend very much on how the global and local epidemic situations evolve.

Pang expects the jobless rate to worsen to 8 percent later this year, with the rate for the catering sector hitting 17 percent.

Among the sectors with the highest unemployment rates in the three months ending June were the consumption- and tourism-related sectors. It stood at 10.7 percent, the highest since late 2003.

The jobless rate for the food and beverage service also stayed near the post-SARS high, at 14.7 percent.