Unemployment rate drops below 5%

BRIGHTER OUTLOOK::The DGBAS predicted that the rate would continue to trend down until the Lunar New Year amid worries over the end of government job programs

By Ted Yang  /  Staff Reporter

Tue, Nov 23, 2010 - Page 12

The nation’s unemployment rate dropped to a two-year low of 4.92 percent last month from 5.05 percent in September after increasing private investment spurred business hirings, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

Seasonally adjusted, the jobless rate declined for the 14th straight month to 4.96 percent last month from 5.08 percent in the previous month, DGBAS said, adding that payrolls rose 0.27 percent to 10.56 million last month from September.

“With the economy posting a robust recovery, private investment has increased and the government’s employment incentive programs continued to remain in place,” DGBAS Deputy Director Liu Tian-syh (劉天賜) told a media briefing.

The agency last week raised its GDP growth forecast to 9.98 percent for the full year after the economy expanded faster than expected in the third quarter and strong demand for exports promoted local companies to hire more workers.

Remaining optimistic about the local job market, Chen Miao (陳淼), director of the macroeconomic forecasting center at the Taiwan Institute of Economic Research (台經院), said by telephone that the robust economy was reflected in a decrease in layoffs because of fewer business closures.

“The number of employees in the industrial and service sectors also posted growth, which means companies have become more confident about the economy,” Chen said, adding that the next few months are the peak season for the service industry.

Until September, the unemployment rate had remained above 5 percent for the longest time in history, 22 months, according to the statistics bureau’s data.

Liu predicted that the unemployment rate would remain above 5 percent for the full year, as the rate averaged 5.31 percent in the first 10 months, saying that the rate would be higher than the 5.17 percent recorded in 2002 when the dot-com bubble burst.

“The unemployment rate would have reached 5.34 percent had it not been for the government’s employment incentive programs,” Liu said. “The number of jobs in public service created by the programs reached 1.05 million last month, up 93,000 from October 2008.”

The number of long-term unemployed dropped for the eighth month in a row to nearly 94,000 last month, down 4,000 from September, while the number of middle-aged people without work remained flat at 115,000, DGBAS data showed.

Looking ahead, the DGBAS predicted that the unemployment rate would continue to trend down until the Lunar New Year, despite worries that the expiration of short-term employment programs may drive the rate back up.

“Some [short-term employment programs] will continue and some will expire, but the robust growth will absorb the unemployed who had been covered by the programs,” Liu said, adding that it would not weigh on the unemployment rate.

Chen agreed, saying that manpower demand among enterprises remains robust, while playing down the impact of uncertainty over global economic growth on the local unemployment rate.