Hong Kong’s Jobless Rate Fell to 3.3%, Lowest in 10 Years
Hong Kong’s unemployment rate unexpectedly fell to the lowest in a decade, aiding household consumption in a city where overseas sales are weakening.
The seasonally adjusted jobless rate for the three months ended Feb. 29 was 3.3 percent, the lowest since March 1998, the government said today on its Web site. The median forecast of 13 economists surveyed by Bloomberg News was for the rate to be unchanged from January’s 3.4 percent.
Banks, retailers and accounting firms are hiring workers as Hong Kong benefits from its proximity to China, the world’s fastest-growing major economy. Low unemployment, tax cuts and falling interest rates may boost consumer spending and help the city weather an export slowdown led by weaker U.S. demand.
“A strong labor market, stimulating fiscal policy environment and negative real interest rates will support domestic consumption, putting it on a solid, upward trend,” said Wang Qian, an economist at JPMorgan Chase & Co. in Hong Kong.
Among 802 employers in Hong Kong, 33 percent said they plan to add workers in the second quarter of 2008, up from 27 percent in the previous three months, according to a survey by U.S. recruitment company Manpower Inc.
Yuanta Securities, Taiwan’s largest brokerage, will increase staff at its Hong Kong unit by four times this year, President Alex Lee said last month.
Hong Kong’s economy expanded 6.7 percent in the fourth quarter from a year earlier, the 18th quarter of uninterrupted growth and the longest expansion since 1997. Household spending jumped 10 percent on rising wages and lower borrowing costs.
Economic growth will slow to between 4 percent and 5 percent this year from a 6.3 percent expansion in 2007 as external demand weakens, Financial Secretary John Tsang forecast last month. The government cut profit and salary taxes, waived property rates and scrapped wine and beer duties to encourage consumption.
An improved job market may escalate inflation as companies pass on higher labor costs to consumers.
Consumer prices rose 3.2 percent in January from a year earlier. Eliminating the temporary effect of the property rate waiver, inflation accelerated to 4.3 percent, the highest level since May 1998.