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Korea's jobless figures continued to fall in June, with the seasonally-adjusted unemployment rate extending its record-setting downward trend, the National Statistical Office (NSO) reported yesterday.

Consequently, the seasonally-adjusted rate - which eliminates variations stemming from seasonal industries such as the construction and agricultural sectors - fell to 3.8 percent, down 0.1 percentage points from the 3.9 percent recorded in May and marking its 17th consecutive month of decline.

Last month's unadjusted unemployment rate fell also fell 0.1 percentage points from May. It now stands at 3.6 percent.

NSO officials noted that both the seasonally-adjusted and the unadjusted jobless rates in June marked the lowest levels since submerging into the economic crisis in December 1997, when they stood at 3.0 percent and 3.1 percent, respectively.

"The fall in unemployment rates is indicative of the healthy state of the economy thanks to the success in the reform drive," said a NSO official. "June's strong figures can also be attributed to outstanding employment conditions in the agricultural and construction sectors."

Consequently, the total number of unemployed workers in June fell to 793,000, down 35,000 from the month prior.

Nonetheless, NSO officials said that the unemployment figures are unlikely to sustain their downward trend and that they are headed upward in the summer.

"Unemployment figures generally tend to rise during the July-August periods, particularly in the agricultural and construction sectors," another NSO official said. "Also, this will likely be fueled by the rise in unemployed students come summer vacation for university students." Consequently, the gross number of employed workers rose to 21.39 million in June, up 41,000 (0.2 percent) from May.

Some experts, however, were concerned about the continued drop in jobless figures.

"Excessive drops or prolonged trends of dropping unemployment figures tend to fuel inflationary pressures," said Oh Suk-tae, an economist at Citibank in Seoul. "If unemployment, particularly the seasonally-adjusted rate, continues to fall, interest rates may need to be adjusted upwards."

Oh added that the Bank of Korea (BOK) may need to readjust interest rates if the rate falls below the "threshold point" of 3.5 percent to counter inflationary pressures and cited the Korea Development Institute's (KDI) recent warning that unemployment below 4 percent may no be ideal.

By industry, most sectors enjoyed modest increases in employment, led by the agricultural sector, which rose by 21,000 or 0.8 percent in June from the previous month. The number of employed construction sector workers also rose by 11,000 or 0.7 percent from the month prior.

However, the manufacturing sector incurred a slight decline of 1,000 workers in June from the previous month, the statistical office reported.

When measured by standards set by the Organization for Economic Cooperation and Development (OECD), the jobless rate also fell to 3.8 percent in June, down 0.2 percentage points or 44,000 workers from the month prior.

The nation reached a peak in its unadjusted unemployment rate in Feb. 1999, when it hit a 17-year high of 8.6 percent. The nation experience massive corporate and financial restructuring efforts which led to widespread layoffs beginning in early 1998.

For the year, the government is forecasting the country's jobless rate to hover around 4 percent and, down from 6.3 percent level in 1999.

The nation's jobless rate has been on a steady decline since hitting a 17-high of 8.6 percent in February last year.