The Korean economy slowed somewhat due to a high base effect from the third quarter, but exports continued to be strong amid improving global economies.
The economy added 279,000 jobs year-on-year in October, and construction and the public sector led the increase. Jobs continued to increase in public administration and welfare due to supplementary budget spending.
Consumer price inflation in November fell 0.5 percentage points from the previous month (up 1.8%→ up 1.3%, y-o-y) due to a cut in natural gas rates.
Mining and manufacturing production fell 1.1 percent in October (up 0.2%→ down 1.1%, m-o-m) after increasing for three months in a row as automobile exports decreased along with demand for automobile parts. Service output fell after rising for four months in a row (up 1.0%→ down 1.7%, m-o-m) due to a slowdown in real estate transactions and durable goods sales. Compared with August, service output rose 0.2 percent during the September-October period.
Retail sales fell 2.9 percent in October (up 3.1%→ down 2.9%, m-o-m) due to a high base effect from the previous month when demand surged before the Chuseok holiday as well as due to declining mobile phone sales before the release of new models scheduled in November. Compared with August, retail sales improved 1.6 percent during the September-October period.
Facility investment fell 14.4 percent in October compared with the previous month (up 5.3%→ down 14.4%, m-o-m) during which investment in semiconductor manufacturing equipment surged. Construction investment rose for the first time in three months (down 1.3%→ up 0.8%, m-o-m) backed by strong civil engineering works.
In October, the cyclical indicator of the coincident composite index fell 0.4 points from the previous month to 100.5, and the cyclical indicator of the leading composite index fell 0.3 points to 101.3.
Exports increased for the 13th consecutive month in November (up 7.1%→ up 9.6%, y-o-y), backed by strong major export items, such as semiconductors and petroleum products.
In November KOSPI declined on profit taking, and the dollar-won exchange rate fell amid the weak dollar and following the Korea-Canada currency swap agreement. Government bond yields fell.
Housing prices continued to grow in November (up 0.13%→ up 0.13%, m-o-m), and Jeonse (lump sum deposits with no monthly payments) prices grew modestly (up 0.06%→ up 0.05%, m-o-m).
The economy is expected to stay on a recovery path given improving global economies and strong exports. However, internal and external risks linger, such as major economies’ monetary policies, trade issues and North related problems.
The government will strengthen its risk management, and will work for the current economic recovery to lead to job creation and improvement in the real economy.
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