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Hong Kong unemployment rate hits highest in more than nine years

HONG KONG (Reuters) – Hong Kong’s unemployment rate rose to the highest in more than nine years in the first quarter as the coronavirus dealt a sharp shock to an economy already in recession.

The seasonally adjusted jobless rate in January-March rose to 4.2% from 3.7% in previous three-month period, government data showed on Monday.

The underemployment rate hit nearly a decade high of 2.1%, from 1.5% in the previous three-month rolling period.

Total employment fell by around 48,800 to 3.72 million.

The year-on-year declines in total employment and the labor force widened further to 3.6% and 2.2% respectively, both the largest on record.

The unemployment rate in the consumption- and tourism-related sectors combined soared to 6.8%, the highest since the global financial crisis a decade ago.

“The labor market will continue to face significant pressure from the economic fallout arising from the pandemic in the near term,” Secretary for Labour and Welfare Law Chi-kwong said in a statement.

The government earlier this month announced relief measures worth HK$137.5 billion ($17.7 billion) to help businesses and people losing money due to the coronavirus outbreak to stay on their feet, and urged employers not to lay off workers.

Some 10,400 retail employees are expected to have lose their jobs in February-May, about 4% of the 260,000 workforce in the retail sector, Hong Kong Retail Management Association said.

Hong Kong’s economy contracted for the first time in a decade in 2019 due to often-violent anti-government protests and the U.S.-China trade war.

While the government of the Asian financial centre has stopped short of full lockdowns seen in some other cities, the recession is expected to deepen this year.

The Chinese-ruled city recorded zero new coronavirus cases on Monday for the first time since early March, health authorities said, though they urged residents to maintain strict hygiene and social distancing practices and avoid unnecessary travel.

(Reporting by Donny Kwok and Twinnie Siu; Editing by Toby Chopra and Kim Coghill)