Unemployment rate plummets
HONG Kong’s unemployment rate unexpectedly fell to 3.3 percent, matching the lowest in a decade, helping to boost consumer spending and sustain growth in the city as global demand fades.
The seasonally adjusted jobless rate was for the three months ended April, the government said yesterday on its Website. Economists surveyed by Bloomberg News had expected the rate to stay at 3.4 percent.
An improved labor market, lower interest rates and tax relief may support domestic household consumption and shield the city from weaker overseas demand.
“Export, visitor and capital flows from Chinese mainland have created most of the jobs for Hong Kong in the past few years,” said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong. “Domestic demand will remain robust amid a solid labor sector, negative real interest rates and fiscal stimulus.”
Deutsche Bank AG, Germany’s largest bank, plans to triple its office capacity in Hong Kong by 2010. The expansion will allow employing as many as 4,000 workers, up from 1,500 currently, the company said on May 6.
Last month’s jobless rate matched February’s as the lowest in 10 years. The government calculates Hong Kong’s unemployment on a rolling three-month basis to smooth out seasonal factors.
Hong Kong’s economy grew 7.1 percent in the first quarter from a year earlier, the fastest pace in two years. Household spending jumped 7.9 percent.
Rising incomes are spurring consumption. The average wage rose 2.7 percent in December from a year earlier.
The increase in wages may also escalate inflation as companies pass on higher labor costs to buyers.