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South Korea is nearing recovery of its pre-pandemic employment levels, with more people venturing out to seek jobs after the economy expanded at a faster pace than had previously been expected.

The economy added 619,000 jobs compared with a year earlier, in a third month of gains, the country’s statistics office reported Wednesday.

South Korea has now recouped more than 80% of the positions lost during the COVID-19 crisis, the finance ministry said in a separate statement.

The jobless rate increased to 3.8% from 3.7% the previous month, compared with analysts’ forecast for a lower reading of 3.6%, as the participation rate rose.

The report shows South Korea’s labor market is recovering, but that it still needs stronger push from the private sector. The delay in a full recovery of jobs lends support to President Moon Jae-in’s call for more fiscal spending, to promote a more balanced rebound from the pandemic, and may add to factors for the central bank to consider as it mulls an exit from a record-low interest rate.

The job market could receive support if another extra budget is passed to support vulnerable industries.

Finance Minister Hong Nam-ki said this month the government was considering a sixth supplementary spending package to shore up businesses amid the pandemic. While consumer activity is picking up and exports are surging, the continued spread of the virus has capped the recovery in consumption.

“It may be a while before employment recovers fully,” said Park Sung-woo, fixed-income analyst at DB Financial Investment. “The BOK will consider a variety of factors including employment to decide on changing its interest rate, but consumption is likely to be slow for the rest of the year.”

A separate report from the central bank showed the economy grew 1.7% in the first quarter from the previous three months, stronger than an initial estimate of 1.6%. The output in services was revised lower, while manufacturing growth was higher than had been expected, according to the Bank of Korea.

The jobs data showed the retail and wholesale sectors continued to be hit hardest, shedding 136,000 positions. Gains at hotels and restaurants slowed to 4,000 in May from 61,000 the previous month. The construction sector added 132,000 jobs while manufacturing gained 19,000.

The government’s job creation efforts helped add 83,000 workers in public services, defense and social security. Jobs in health care and welfare services increased by 241,000 in May. The finance ministry said that among the jobs created this year, 40% were related to the public sector.

The total number of employed people rose to 27.3 million on a seasonally-adjusted basis, just shy of the pre-pandemic peak of 27.5 million in February 2020. The economically active population — which serves as the denominator for measuring unemployment — increased, with 489,000 more people becoming employed or looking for jobs.

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