The jobless rate was worse than the 5 percent rate expected by economists in a Bloomberg survey. The figure is the highest rate since June 2021, when unemployment also reached 5.4 percent. The underemployment rate rose to 3.8 percent from 3.1 percent, the Census and Statistics Department said in a report Thursday.

While the labor market deteriorated further, “the situation showed some stabilization in the latter part of the period in tandem with the receding local epidemic and revival of local economic activities,” Secretary for Labor and Welfare Law Chi-kwong said in the release.

The elevated unemployment rate, which is compiled for a moving three-month period, is one of several challenges for Hong Kong’s economy, which is also contending with rising interest rates worldwide, struggling exports due to China lockdowns and higher global commodity prices. Last week, the government downgraded its annual growth forecast to a range of 1 percent to 2 percent, from a previous expectation of 2 percent to 3.5 percent growth.

As social restrictions ease, the labor market should improve, Law said in the statement, adding that a consumption voucher plan and employment support programs should also provide some relief.

Financial Secretary Paul Chan has also said recently that employment should pick up again in the coming months. After warning Sunday that the jobless rate announced this week was expected to deteriorate, Chan wrote in a blog post that it would “gradually improve” should infections remain stable.

Hong Kong is continuing to relax its virus curbs, even as the city records hundreds of cases a day. From Thursday, restaurants can remain open until midnight, an extension of a previous 10 p.m. closing time. Bars will be permitted to open until 2 a.m., while mask requirements for indoor exercise will be lifted.

Still, quarantine and testing requirements remain for inbound travel.