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Jobless rate climbs to highest ever

Updated: 2009-06-23 07:40

(HK Edition)

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TAIPEI: Taiwan's jobless rate set record in May as fresh graduates poured onto the market, seeking jobs that had vanished amid the slump in global demand.

The seasonally adjusted unemployment rate rose to 5.84 percent from 5.77 percent in April. That's the ninth straight time the jobless rate has gone up, the statistics bureau said yesterday in Taipei. That's also the highest rate since the government began tracking unemployment in 1978. The record figure compares with a median estimate of 5.8 percent in a Bloomberg News survey of 10 economists prior to the release.

Joblessness is rising across Asia as the region's export-dependent economies are buffeted by fallout from recessions in Europe and the US and a slowdown on the Chinese mainland. Taiwan's economy contracted an unprecedented 10.24 percent last quarter as businesses cut spending and overseas shipments dropped.

"In the near term, there will be pressure on Taiwan companies to shed jobs, though the pressure has started to ease as the global economy moves toward a recovery," said Wang Qian, an economist at JPMorgan Chase & Co in Hong Kong. "The sharp decline in industrial employment in previous months seems to have moderated somewhat."

Jobless rate climbs to highest ever

Taiwan's Asustek Computer Inc, a maker of computers and mobile phones, plans to cut 450 to 500 jobs worldwide, Digitimes newspaper reported last month, without naming a source.

Taiwan's central bank, in the hope of stimulating growth, cut its benchmark interest rate to a record low 1.25 percent.

The government plans additional stimulus measures, carrying a price tag of NT$858.5 billion ($26 billion) over four years. The money will go to infrastructure projects, tax cuts and consumer grants.

Demand for exports, which account for about 70 percent of Taiwan's economy, may start to improve as the mainland implements a 4 trillion yuan ($585 billion) stimulus package and US consumers increase spending. The Chinese mainland and the US are Taiwan's largest overseas markets.

Taiwan Semiconductor Manufacturing Co said this month the worst is over for the global chip industry. The company, which makes chips for Qualcomm Inc and Intel Corp, is rehiring laid-off workers amid optimism of a recovery.

The number of unemployed people rose to 637,000 from 628,000 in April. Without adjusting for seasonal factors, Taiwan's jobless rate climbed to 5.82 percent from 5.76 percent in April.

"Unemployment will continue rising for the next few months because of the entry of graduates into the market," Huang Jiann Jong, a deputy director at the census bureau told reporters.

Still, he said the number of people with jobs rose in May from April, the second straight gain, an indication the labor market is starting to stabilize.

Bloomberg

(HK Edition 06/23/2009 page2)

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