"Hong Kong Jobless Rate Rises to Highest Since 2005 | AboutHK.Com - more information about HK"
|  Sophie Leung, Bloomberg
Hong Kong’s jobless rate rose to the highest in almost four years as improvements in the economy failed to flow through to the labor market.
The seasonally adjusted unemployment rate for the three months ended June 30 climbed to 5.4 percent, the government said today on its Web site, from 5.3 percent through May. The latest number matched the median estimate of eight economists surveyed by Bloomberg News.
Hong Kong’s economy probably grew in the second quarter from the previous three months, rebounding from a record decline as export demand improved, Financial Secretary John Tsang said July 6. The Hang Seng Index has climbed 35 percent this year and home sales rose last month to the highest value in a year.
“We are seeing light at the end of the tunnel because the global economy is pulling out of recession,” government economist Helen Chan said on Bloomberg Television today. “Our exports have already bounced back,” she said, adding that unemployment is a “lagging indicator.”
The jobless rate, the highest since September 2005, is “expected to face upward pressure in the near term” as graduates and school leavers seek work, Secretary for Labor and Welfare Matthew Cheung said in today’s statement.
Hong Kong’s exports fell more slowly in May from a year earlier, adding to signs that global demand is stabilizing. The city’s June trade figures are due July 27.
Shrinking Economy
Gross domestic product fell a seasonally adjusted 4.3 percent in the first quarter from the previous three months, the biggest decline since data began in 1990.
Tsang said that while the economy probably shrank in the second quarter from a year earlier, the contraction would be smaller than the 7.8 percent decline in the first quarter.
“The real economy is still weak,” said Kelvin Lau, an economist at Standard Chartered Plc in Hong Kong. “The recent recovery in property and stock markets is mainly liquidity- driven.”
Baker & McKenzie LLP, the world’s second-largest law firm by revenue, said July 7 that it plans to cut 11 percent of its lawyers and professional staff in Hong Kong and China because of the “very challenging” economic climate.
The number of bankruptcy petitions in Hong Kong rose 89 percent in June to 1,619 from a year earlier, according to the Official Receiver’s Office.
The city has budgeted HK$87.6 billion ($11.3 billion), or about 5.2 percent of GDP, for stimulus and relief spending since 2008, according to Tsang. It rolled out extra measures in May, including rent subsidies and salary tax cuts.
To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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