SOUTH KOREA'S HIGHEST UNEMPLOYMENT

SOUTH Korea's unemployment rate hit an eight-year high in August as mandatory minimum wages rose, adding to economic policy frustrations and political challenges for  President Moon Jae-in whose approval rating is now at its lowest since inauguration.

The unemployment rate rose to 4.2 percent in August from 3.8 percent in July in seasonally adjusted terms as the number of unemployed rose by 134,000  people from a year earlier.

This was the Labour market's worst performance since January 2010, when the economy was still reeling the global financial crisis, when 10,000 jobs were lost Finance Minister Kim Dong-yeon said on Wednesday the government will need to adjust its wage policies, signalling some future  soft-pedalling  in the drive to raise minimum wages.

''[The government] will discuss slowing the speed of minimum wages hikes  with the ruling party and the presidential office,'' Kim Dong-yeon told a policy meeting in Seoul, adding he did not expect a  short-term recovery in the job market.

Experts say the uproar over jobs could also cost Moon considerable political capital as he pursues closer ties with Pyongyang, as any good news from from an inter-Korean summit may not be enough to offset public discontent over the lack of jobs and soaring house prices.

More than     60 percent of respondents     in a Gallup Korea survey criticised   Moon's handling of the economy, including his inability to improve the livelihoods of ordinary citizens' and  'minimum wage increases'.

A weekly Gallup Korea's survey released last Friday showed  Moon's support fell  4 percentage points to 49 percent, the lowest since he took office in May 2017.

''At this rate, we may not see any gains in the number of unemployed in September or the month after that,'' said Oh Suk-tae, an economist at Societe Generale. [Agencies]