Recruiting in China

Hong Kong's jobless rate stayed at the lowest level in a decade, helping domestic consumption to sustain economic growth as the export outlook dims.

The seasonally adjusted unemployment rate for the three months ended May 31 was unchanged at 3.3 percent, the government said today on its Web site. That matched the median estimate of 14 economists surveyed by Bloomberg News.

``The strong labor market will continue to support the economy,'' said Michael Dai, senior economist at Bank of China (Hong Kong) Ltd. ``There have been big salary increases across the board and that's encouraging consumption.''

Hong Kong's economy grew 7.1 percent in the first quarter from a year earlier, the fastest pace in two years. The expansion for the year may slow to between 4 percent and 5 percent as export demand weakens, the government said last month.

World economic growth will probably slow to 2.7 percent in 2008 from 3.7 percent last year on rising food and energy prices and the subprime credit crisis, the World Bank said last week.

Hong Kong's household spending rose 7.9 percent in the first quarter from a year earlier.

The labor market remained buoyant, Matthew Cheung, the Secretary for Labor and Welfare, said in today's statement.

Increased competition for labor has pushed salaries higher and added to inflation in the city. Wages climbed 2.7 percent in December. Figures for March are due this month.

Price Increases

Producer prices jumped 5.8 percent in the first quarter from a year earlier, the most on record. Consumer prices rose 5.4 percent in April, more than double the 2 percent pace for all of 2007.

For the year starting in April, salaries for civil servants were raised by 6.3 percent for the upper pay group and by 5.29 percent for middle and lower pay groups.

Stock market declines and a faltering global economy may erode business and consumer confidence. The key Hang Seng Index has fallen 17 percent this year.

A survey this quarter of 807 employers in the city showed a decline in the proportion who said they expected to add workers in the following quarter. The drop was from 33 percent to 30 percent, U.S.-based recruitment company Manpower Inc. said.