- Current Economic Trends
Retail sales, services and construction investment rose in September. Mining and manufacturing and facility investment slowed. October job data read a steady increase and consumer price inflation gathered speed.
Industrial production grew 1.3 percent from the previous month in September due to strong services (up 1.3%, m-o-m and up 3.3%, y-o-y). Mining and manufacturing slowed (down 0.8%, m-o-m and down 1.8%, y-o-y). Compared with a year ago, industrial production rose 1.4 percent.
Construction investment (up 3.5%, m-o-m and down 8.4%, y-o-y) improved in September, as well as retail sales (up 2.5%, m-o-m and up 3.7%, y-o-y). Facility investment declined (down 1.0%, m-o-m and down 4.5%, y-o-y).
Exports rose 24.0 percent year-on-year in October due to strong semiconductors, petrochemicals and other major exports. Average daily exports, an indicator calculated according to the days worked, rose 24.0 percent from a year ago (US $2.13 billion, October 2020 >> US $2.65 billion, October 2021).
The consumer sentiment index (CSI) rose 3.0 points in October to 106.8. The business sentiment index (BSI) for the manufacturing sector stayed flat at 90, and the BSI outlook for November dropped 5 points to 88.
The cyclical indicator of the coincident composite index for September remained flat at 101.2, and the cyclical indicator of the leading composite index dropped 0.3 points to 102.1.
The economy added 652,000 jobs year-on-year in October and the unemployment rate fell 0.9 percentage points from a year ago to 2.8 percent.
Consumer prices rose 3.2 percent year-on-year in October partly due to a low base effect brought about by mobile carrier subsidies paid a year ago. Core inflation rose 2.8 percent.
Stock prices fell in October due to growing concerns about global inflation, as well as rising prospects of major economies’ monetary policy normalization. The won strengthened as concerns over Chinese real estate developer Evergrande receded. Korea Treasury yields rose.
Housing prices continued to rise in September (up 0.96% >> up 0.92%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.63% >> up 0.59%, m-o-m).
Exports being strong and job growth continuing, domestic consumption will likely improve with the government’s policy shift to ‘living with COVID-19’ leading to the reopening of close contact services.
Global economic recovery seemingly keeping on track, high commodity prices are arousing inflation concerns and uncertainties linger about major economies’ monetary policies, as well as worries over supply chain disruptions.
The government will work for the success of its ‘living with COVID-19’ policies, implementing measures to boost domestic consumption and others to speed up real economic recovery, and at the same time will properly manage inflation risks and commodity shortages.
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