THe Hong Kong Census and Statistics Department just released the latest employment data, covering the Dec 2006 - Feb 2007 period. They report that the unemployment rate has declined to its lowest level since 1998 (4.3%).
However, at the same time, total employment and the labour force also declined slightly, by 8000 and 11000 respectively.
While one month's economic news may be due to one-off factors and may not constitute a trend, this is mixed news for the economy. The economy is not creating new jobs, and the only reason for the fall in the unemployment rate was that people were leaving the labour force faster than jobs were disappearing!
The most popular labour market statistic is the unemployment rate, but just focusing on that can be misleading. A strong labour market is one where the labour force participation rate is growing (a larger portion of the working age population wants to work), the employment ratio is growing (a larger portion of the working age population is working) AND the unemployment rate is falling.
The size of the population is required to calculate the first two of these statistics, and this is not available on a monthly basis. So the only way the participation and employment ratios are rising is if the working age population fell by 0.3% or more. While this is possible, it is highly unlikely: the working age population in Hong Kong (defined as persons aged 15 and over) is growing at about 1.3% per year, as the population ages. Any sudden change to this is likely to be due to a spike in emigration, which would be a concern for other reasons.