HK labor market conditions improve at year-end

Solid economic growth in line with ever-expanding opportunities for Hong Kong service exports upon China's increasing globalization would further improve labor conditions.

Morgan Stanley said the headline unemployment rate eased for the second straight month, reaching 4% in October-December (4.1% in Sep-Nov, 4.2% in Aug-Oct), according to a report by Denise Yam and Ernest Ho of Morgan Stanley Research Asia/Pacific. The underemployment rate also retreated further, to 1.8% (from 1.9%).

Multi-dimensional datapoint to convincing improvement in overall labor market conditions: Headline percentages aside, various datapoints unanimously tell of genuine improvements in overall labor market conditions, in that the unemployment rate was brought down by job growth rather than labor force adjustments. Total employment continued to show positive momentum, with YoY growth hopping to 1.9% (+1.3% in Sep-Nov, +1.2% in Aug-Oct) on the back of strong economic growth. The total job count in October-December jumped by 21,900 over September-November (+10,400 in Sep-Nov, +10,800 in Aug-Oct), beating the 14,900 expansion in the labor force.

Optimistic outlook: The 0.9-percentage-point ease in 2010 has not yet brought the jobless rate back to the pre-crisis levels (3.2% in Jun-Aug 08). Nevertheless, solid economic growth on the back of ever-expanding opportunities for Hong Kong service exports upon China's increasing globalization will remain a key positive for the job market in the years to come. Yam and Ho are hopeful that the unemployment rate could retreat to below 3.5% in the course of 2011.