08.24.2001
Structural unemployment surfacing

• Development: The unemployment rate shot up to 4.9% unadjusted (4.7% adjusted) in July, up from 4.5% in June and an average of 3.0% in 2000.

• Analysis: In the first seven months of the year, a total of 3,300 factories were closed. In July, the number of jobless people rose to 485,000 (up 43,000 MoM). Of this number, 218,000 are unemployed due to factory closure.

• Primasia View: We forecast the jobless rate will top 5% in August, the peak month of the year. Even if economic recovery is underway next year, we don’t expect the unemployment rate to fall back to the 3.0% level due to surfacing structural problems in the economy.