• The unemployment rate remained stable at 3.2% for two straight months in November

- Unemployment rate (seasonally adjusted): edged higher to 3.3% (Oct: 3.3%).

- Unemployed persons (0.4% MoM; Oct: -1.8%): fastest expansion in four months, bringing the total unemployed persons to 513.9k (Oct: 512.1k).

● Labour force and employment growth grew at the same pace of 0.3% MoM (Oct: 0.2%)

- Labour force: 15.83m persons (Oct: 15.78m).

- New jobs creation: largest in seven months (49.4k; Oct: 35.7k).

- Manufacturing sector: employment increased (0.2% MoM; Oct: 0.0%), whilepayrollsteepened its decline(-0.8%; Oct:-0.3%).

● Labour force participation rate ticked up to 68.8% (Oct: 68.7%)

- Labour force expanded (0.3%), while those outside of the labour force charted a muted growth (0.0%).

- Job vacancies rose after two months of contraction (6.4%; Sep: -3.7%), reaching 80.4k inOctober,predominantlycomprised of low-skilled jobs (share: Oct: 67.5%; Sep: 64.7%).

● Stable unemployment rate globally

- US: maintained at the lowest in nearly five decades (3.5%; Nov: 3.5%), in spite of a downturn in the manufacturing sector’s employment mainly due to the impact of US-China trade war.

- Japan: first improvement in four months (2.2%; Oct: 2.4%).

● Unemployment rate to inched up in 2020 (3.4%; 2019F: 3.3%; 2018: 3.3%), in line withthesofter economictrajectoryfor this year (4.3%; 2019E: 4.5%)

- We maintain our cautious outlook as manufacturing slowdown may persist in the 1H20 on the back of prolonged trade war and heightened risk of geopolitical tension in the Middle East, and the pro-democracy rally in Hong Kong.

- Nevertheless, the manufacturing sector is expected to gradually recover in the 2H20 attributable to the potential upturn in the tech cycle while government initiative to boost employment may also support the employment growth.

Source: Kenanga Research - 14 Jan 2020