People wearing face masks as a precaution against coronavirus infection look at items for sale on a street in Hong Kong on Novr 9, 2020. (PETER PARKS / AFP)

Hong Kong’s unemployment rate was unchanged in October as the city struggles to emerge from a deep slump triggered by social unrest and the coronavirus outbreak.

The jobless rate for the August-to-October period held at 6.4 percent for a second month, matching a high from January 2005, according to a government report Tuesday. The reading is better than the 6.6 percent median forecast in a Bloomberg survey of economists. The underemployment rate also remained unchanged at 3.8 percent.

The jobless rate for the August-to-October period held at 6.4 percent for a second month, matching a high from January 2005, according to a government report Tuesday

Unemployment has shown signs of stabilizing in recent months, including an unexpected drop in July and no change in August. The city’s economy has been under pressure for more than a year following anti-government protests and then months of stringent social- distancing measures to control the COVID-19 outbreak.

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There are nascent signs of a recovery although the economy has some way to go to return to pre-pandemic levels. Gross domestic product rose 2.8 percent in the third quarter from the previous three months, in part from a surge in exports to the mainland. On a year-on-year basis, GDP still declined 3.5 percent, with the government forecasting a 6.1 percent contraction for the full year.

“While the overall economic situation saw some improvement in recent months, hiring sentiments among employers would probably remain cautious, especially when the economic outlook is still clouded by the evolving pandemic situation,” Secretary for Labour and Welfare Law Chi-kwong said in the report. “Labor market conditions remained difficult, but showed further signs of stabilization as the local epidemic situation stayed contained during that period.”

Total employment rose by about 2,900 to 3.63 million, while the labor force increased slightly to 3.89 million. The number of unemployed fell by about 2,000 to 257,800 while 148,000 people were underemployed in the same period.

Joblessness in transportation rose to 6.2 percent, the highest in almost 17 years. Cathay Pacific Airways Ltd. said in October it would slash more than 5,000 jobs and close a regional carrier in a massive restructuring stemming from the coronavirus outbreak.

The unemployment rate in the hard-hit retail, accommodation and food services sectors declined by 0.5 percentage points to 11.2 percent.

However, economists are still not upbeat about the city’s job-market prospects amid sluggish economic growth.

“We expect the economic recession to slow down further in the fourth quarter this year. We remain wary of some downside risks, including the virus resurgence in Europe and the United States, the government tightening of social distancing measures, the persistent pandemic uncertainty, and the expiry of the Employment Support Scheme,” OCBC Wing Hang Bank Economist Carie Li Ruofan warned.

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With inputs from Bloomberg