Hong Kong jobless rate jumps to highest in over 15 years

Hong Kong’s unemployment rate rose in June to the highest in more than 15 years, as the city’s economy remains under pressure from the coronavirus pandemic as well as escalating U.S.-China tensions.

The jobless rate rose to 6.2% for the April to June period, below the median forecast of 6.4% among economists surveyed by Bloomberg. The latest reading is the highest since January 2005. The increase marks nine straight months of worsening unemployment, according to data compiled by Bloomberg.

Hong Kong’s surging jobless total is the latest troubling indicator for an economy mired in its deepest recession on record amid the coronavirus outbreak. The city faces more pressure from a developing third wave of the virus and the deteriorating relationship between the U.S. and China after Beijing imposed a national security law in the city.

“The renewed surge in local cases lately serve as a timely reminder that the economic outlook is still subject to huge uncertainties,” said Secretary for Labor and Welfare Law Chi-kwong in the release. “The local labor market situation going forward will depend very much on how the global and local epidemic situations evolve.”

The labor force total inched higher, but the number of unemployed also rose by about 10,000 people to 240,700. Total employment was largely unchanged, suggesting some stabilization at the end of the quarter, Law said.

Unemployment increased across almost all industries in the period, with the consumption and tourism-related sectors rising to 10.7% in the period, the highest since October 2003 and the aftermath of the SARS crisis. Joblessness in the food and beverage sector stayed near the post-SARS high at 14.7%, according to the government release.

Joblessness in the import and export trade, warehousing and support activities for transport and the decoration, repair and maintenance of buildings rose to multi-year highs, the report said.

Rising unemployment also has led to a greater number of people competing for fewer jobs, worsening the city’s already wide wealth gap as tens of thousands have been thrown out of work with little social safety net.