Hong Kong’s Jobless Rate Surged to 5.4% During Covid Wave

(Bloomberg) -- Hong Kong’s unemployment rate surged to 5.4% for the three months ended April as the city’s Covid restrictions continued to weigh on businesses and keep people at home.

The jobless rate was worse than the 5% rate expected by economists in a Bloomberg survey. The figure is the highest rate since June 2021, when unemployment also reached 5.4%. The underemployment rate rose to 3.8% from 3.1%, the Census and Statistics Department said in a report Thursday.

While the labor market deteriorated further, “the situation showed some stabilization in the latter part of the period in tandem with the receding local epidemic and revival of local economic activities,” Secretary for Labor and Welfare Law Chi-kwong said in the release.

The elevated unemployment rate, which is compiled for a moving three-month period, is one of several challenges for Hong Kong’s economy, which is also contending with rising interest rates worldwide, struggling exports due to China lockdowns and higher global commodity prices. Last week, the government downgraded its annual growth forecast to a range of 1% to 2%, from a previous expectation of 2% to 3.5% growth.