10.24.2001
Production slump dragging down employment

• Unemployment rate shot up to 5.3% (5.0% adjusted) last month from 5.2% (4.8% adjusted) in Aug. Not only is this a new record but also the first time Sept. rate has topped Aug. It is estimated that around 20% of job losses came from Hsinchu Science Park. These jobs will more than likely be available again, once GDP starts to recover in 2H02. However, job losses in traditional industries may not recover and this will push average unemployment above historic levels. We forecast average jobless rate will jump to 4.5% this year from 3.0% in 2000, giving the Central Bank plenty of room to further trim its rediscount rate.