The seasonally adjusted unemployment rate rose 0.1% in the first quarter, to 7.5%. The retail trade, construction, manufacturing and restaurant sectors are hardest hit.

Meanwhile, the underemployment rate remained stable at 2.9% over the last two quarters, from October through December, and January through March.

Commenting on the figures today, the Secretary for Economic Development & Labour Stephen Ip explained that a relatively larger decline in employment than in the labour force was to blame for the rise. The retail trade and construction sectors were particularly affected after the Lunar New Year holidays.

The figures do not yet reflect the adverse impact of the outbreak of atypical pneumonia in Hong Kong since mid-March, he added.

He believes the impact will become more apparent from the next quarter's figures.

Sectors which are generally more labour-intensive - such as the retail trade, restaurants, tourism and consumer services - may face greater pressure on the employment front.

The Government is fully aware of the hardship the public is now facing, Mr Ip said, and he hoped the impact of atypical pneumonia on employment will be short-lived.

To improve the situation, Mr Ip stressed the Government's top priority is to combat atypical pneumonia and restore confidence in Hong Kong and overseas. 

The Government is considering a series of measures to provide short-term relief and help the economy recover in the medium to long term.

Meanwhile, latest information on Hong Kong's situation will be made public to keep the world abreast of the issue.

He also called on employers and employees to work hand-in-hand when facing the hard times and avoid any lay-offs.