Employment growth remains miniscule at almost 0%

Job cuts in finance are the culprits.

According to UBS, the labour market has been weakening despite the steady unemployment rate.

In particular, employment growth has slowed very sharply to almost 0%y/y in 1Q14, driven in part by job cuts in the financial sector.

Here’s more from UBS:

Changes in the labour market provide important clues about income growth and inflation in Hong Kong. A rise in unemployment implies weaker wage growth and less pressure on inflation.

The domestic sectors, in particular construction (thanks to the strong pipeline of infrastructure projects) and hospitality services, are still creating jobs. But in part reflecting tightening liquidity, job growth in the higher paid service sector will remain subdued.