According to Jinshi Data, South Korea's unemployment rate fell to 2.5% in July, the lowest level since October last year. The number of employed people increased by 172,000 year-on-year, and the labor force participation rate was 64.9%. The tightening labor market may bring upward pressure on prices. The agency estimates that the unemployment rate must rise to 3.2% to have a neutral impact on inflation.
The data could add to the case for keeping monetary policy restrictive given concerns about rising house prices. The Bank of Korea is expected to keep policy unchanged at its meeting next week, and many economists have pushed back their expectations for when the central bank will shift to easing, with October being the most likely date. Last week, former policy board member Lee Seung-heon said a rate cut in October would be difficult.