Hong Kong's jobless rate fell to a 15-month low - a development that is supporting consumption and economic growth.

The seasonally adjusted unemployment rate for the three months ended March 31 slid to 4.4 percent, the government said Tuesday.

The latest reading was lower than the median 4.5 percent estimate of eight economists surveyed by Bloomberg News.

Commenting on the data, Secretary for Labor and Welfare Matthew Cheung said Tuesday, "While business activities in a number of sectors moderated somewhat owing to seasonal fluctuation, the fundamentals of the labor market remained robust. Take the construction industry as an example, the unemployment rate of the sector has registered a cumulative decrease of 4.7 percentage points from the peak in early 2009 and, in absolute terms, the cumulative reduction in the numbers unemployed amounted to 36 percent."

"The number of private sector vacancies posted by the Labour Department increased by 64.6 percent to 65,972 in March 2010 from 40,088 in the preceding month, while it increased by 31.3 percent over 50,228 in the same period of last year. The vacancies cover a wide variety of positions," he said.

Meanwhile, the city's retail sales rose at the fastest pace in more than 20 years in February as the jobless rate fell and gross domestic product expanded in the nine months through December after a year-long recession.

"The better labor market outlook should strengthen consumer sentiment," Janus Chan, an economist at HSBC Holdings Plc, said in Hong Kong before the report, adding, "Domestic residents are more willing to spend and thus benefit private consumption."

Financial Secretary John Tsang budgeted HK$20.4 billion in February for the year starting April 1 to support growth. The stimulus package included personal income-tax rebates and property-rate waivers.

More jobs will likely be created in the next one or two months, even as the labor supply increases with fresh graduates and school leavers entering the workforce, Secretary Cheung said.

HSBC confirmed yesterday that it plans to recruit more than 300 people in Hong Kong, mainly for its wealth management unit, as a rising number of affluent customers from the mainland seek to invest in or through the city, while BOC Hong Kong said on April 12 it would hire more people to meet "growing business needs."

China Construction Bank (Asia) Corp, a unit of the country's second-largest lender, aims to hire as many as 400 people in Hong Kong this year, as the bank plans to open about seven more branches in the city, spokeswoman Willa Wong said on Monday.

"The employment outlook depends very much on how well the economy can sustain the current momentum, thereby creating jobs to absorb these first-time job-seekers," Cheung noted.

Bloomberg News

(HK Edition 04/21/2010 page3)