Lowest HK jobless rate

By Nipa Piboontanasawat  |   2008-6-18  |     NEWSPAPER EDITION

HONG Kong's jobless rate stayed at the lowest level in a decade, helping domestic consumption to sustain economic growth as the export outlook dims.

The seasonally adjusted jobless rate for the three months ended May 31 stayed at 3.3 percent, the government said yesterday on its Website. That matched the median estimate of 14 economists surveyed by Bloomberg News.

"The strong labor market will continue to support the economy," said Michael Dai, senior economist at Bank of China (Hong Kong) Ltd. "There have been big salary increases across the board and that's encouraging consumption."

Hong Kong's economy grew 7.1 percent in the first quarter from a year earlier, the fastest pace in two years. The expansion for the year may slow to between 4 percent and 5 percent as export demand weakens, the government said last month.

World economic growth will probably slow to 2.7 percent in 2008 from 3.7 percent last year on rising food and energy prices and the United States subprime credit crisis, the World Bank has said.

Hong Kong's household spending jumped 7.9 percent in the first quarter from the same period a year earlier.

The labor market remained buoyant, Matthew Cheung, the secretary for labor and welfare, said in the statement.

A keen battle for labor has boosted salaries and added to inflation. Wages rose 2.7 percent in December. Figures for March are due this month.

Producer prices jumped 5.8 percent in the first quarter from a year earlier, the most on record. Consumer prices rose 5.4 percent in April, more than double the 2 percent pace for all of 2007.

For the year starting in April, salaries for civil servants went up by 6.3 percent for the upper pay group and by 5.29 percent for middle and lower pay groups.