The nation’s unemployment rate climbed for the sixth straight month to a six-year high of 5.03 percent last month, with the number of unemployed people hitting a record 549,000 as more companies shut down or laid off workers to cope with a shrinking economy, the Directorate General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The statistics agency and economists warned of higher unemployment figures later this year, adding that stimulus measures could help mitigate the pain but would not remedy the situation.
“The unemployment rate rose 0.39 percentage points, or 42,000 people, to 5.03 percent last month, the highest since October 2002,” DGBAS Deputy Director Huang Jiann-jong (黃建中) told a press conference.
The seasonally adjusted figure also rose 0.39 percentage points to 5.01 percent — the highest since July 2002, he said.
Huang blamed the situation chiefly on sharp declines in exports that prompted many firms and factories to leave the market or lay off employees.
As many as a quarter of a million people lost jobs to business closures or downsizing last month, compared with 202,000 people in November, the DGBAS report showed.
Huang said the figures failed to fully reflect the overall picture, as an extra 1.2 million people worked less than 35 hours a week last month on falling demand for labor. Among them, 88,000 people worked less than 16 hours a week, which qualifies as “hidden unemployment,” he said.
Huang voiced concern for the unemployment rate among people in the 45 to 64 age bracket, which rose 9.19 percent last month to 88,000, topping other age groups.
College graduates continued to top educational groups, with an unemployment rate of 4.78 percent last year, the report said.
Altogether, the unemployment rate stood at 4.14 percent last year, up 0.23 percentage points from 2007, the report said.
Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup Inc Taiwan, said unemployment could reach 5.5 percent in the first half, adding that the government should ensure that the NT$500 billion (US$14.9 billion) stimulus package to spur economic growth is fully implemented.
“There is little the central bank can do to fight unemployment,” Cheng said by telephone. “Fiscal policy is likely a better tool. The government should spend more on infrastructure and consider distributing more consumer vouchers this year.”
Cheng said that while the unemployment rate was not unexpected, the decline in job growth was worrying.
The workforce contracted by 56,000 people last month, showing that market dynamism was flagging, the report said. Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank, echoed the concern, adding that the job contraction could reach levels seen in the recession of 2001.
Phoo said that while the voucher program and other stimulus measures provided some relief, they would not be sufficient to turn the economy around.
“The job market will probably remain drab the entire year as exports are expected to contract for the first three quarters,” Phoo said by telephone. “Companies will not hire new workers before a sustained recovery.”