● The unemployment rate remained unchanged at 3.5% in March (Feb: 3.5%), reflecting a steady labour market condition underpinned by resilient domestic demand in spite of signs that the economy might have peaked and an economic slowdown is imminent.

− Unemployed persons (-0.5% MoM; Feb: -0.7%): decreased for twenty consecutive months, albeit at the slowest pace in three months.

− Consequently, the number of unemployed persons fell to 588.7k (Feb: 596.9k), the lowest since February 2020. Additionally, the actively unemployed fell to 472.9k (Feb: 475.5k), the lowest since April 2020 (459.8k).

● Employment expanded for twenty straight months at a steady pace (0.2% MoM; Feb: 0.2%), bringing total employment to 16.22m people, a record high

− Labour force: growth sustained (0.2% MoM; Feb: 0.2%), with the total labour force reaching a record high of 16.81m persons (Feb: 16.78m). − New job creation: increased (33.7k; Feb: 30.0k) at the fastest pace in six months.

● Labour force participation rate remained unchanged in March (69.9%; Feb: 69.9%), a record high

− The number of those outside the labour force fell (-0.08% MoM; Mar: -0.02%) at the fastest pace in eight months, to 7.231m as more people returned to find work.

● Labour market conditions improved among advanced economies in April

− US: unemployment decreased (3.4%; Mar: 3.5%) as job growth beat expectations amid a resilient labour market. − KR: unemployment eased (2.6%; Mar: 2.7%) due to higher employed people surrounded by sustained job added.

● We expect the labour market to sustain recovery, but we maintain our 2023 unemployment rate forecast at 3.5% (2022: 3.8%) for now

− We maintain the average unemployment rate forecast for 2023 despite recent better-than-expected labour market conditions. This is largely due to our cautiously optimistic outlook about the recovery in the domestic economy in the 2H23, given the prospect of a global economic slowdown brought on by tighter financial conditions, weighing on businesses and household spending going forward. However, the adverse impact is expected to be relatively mild thanks to various policy supports to further reduce the unemployment rate.

− Given the relatively lower unemployment rate in 1Q23 (3.5%; 4Q22: 3.6%), which bodes well for household spending, we retain our 1Q23 GDP growth forecast at 5.1% with a full-year projection at 4.7% (2022: 8.7%).

Source: Kenanga Research - 12 May 2023