More gloom as unemployment rate hits 3.3pc

Business | Bloomberg and Stella Zhai 21 Jan 2020

Hong Kong's unemployment rate rose to a 2.5-year high in December last year, with full-year bankruptcy petitions adding to a 3-year high.

The local jobless rate for the October to December period rose to 3.3 percent. The construction industry - particularly in decoration, repair and maintenance of buildings - also "deteriorated visibly", according to a government release. The labor force also shrank during the period, government data showed.

"The labor market slackened further as economic conditions stayed weak," Secretary for Labour and Welfare Law Chi-kwong said. Business in the consumption and tourism-related sectors - retail, accommodation and food services - "remained in the doldrums."

The unemployment rate in the consumption and tourism industry remained at a three-year high of 5.2 percent, hinting at stabilization after previous increases. However, the underemployment rate "rose visibly" compared to the three months prior, especially in the food and beverage industries, Law said.

The labor market will be subject to even more pressure if the economy remains weak, Law said.

Meanwhile, the number of compulsory winding-up and bankruptcy petitions rose 25.9 percent year-on-year to 713 cases last December, and the whole-year figure increased 8.97 percent to 8,151, according to data from the Official Receiver's Office.

Moody's Investors Service lowered Hong Kong's rating as a long-term issuer of debt by one notch yesterday, just months after Fitch Ratings took a similar action amid political protests.

Moody's cited a degree of "inertia" characterizing the legislative and executive branches of government in the statement, as it lowered the rating to Aa3 from Aa2. The ratings agency also changed the outlook to "stable" from "negative."

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