THE jobless are facing a black Christmas and a bleak New Year, with analysts tipping the unemployment figures to keep rising into the summer, bringing more loan defaults and lower retail sales next year. With the Government due to release the three-monthly unemployment figures to October, economists expect a 0.1 to 0.2 percentage point rise to 5.4 or 5.5 per cent. The numbers out of work are expected to keep rising into the middle of next year, hitting a 7 to 8 per cent high next year or in early 2000. Retailers face some of the worst pain, as unemployment will hit consumer confidence. Many in the sector are bracing for a new round of job cuts and store closures. Hongkong Bank senior economist Clarence Wong Shek-fai said: 'After the Lunar New Year, [the retailers] will consider downsizing.' Recruitment firm EL Consulting's principal Alfred Chown said many junior to middle managers were expecting to be laid off in the New Year. 'They are concerned that they may get their bonus and then get laid off,' he said. Despite signs of a property-sector upturn, many expect unemployment to go on rising through next year. Morgan Stanley Dean Witter economist Andy Xie Guoshong forecast peak unemployment of 7 per cent early in 2000. Among the more gloomy forecasts for unemployment, Credit Lyonnais Securities Asia (CLSA) is expecting the figure to reach 8 to 9 per cent next year. With the jobless rate at 9 per cent, the impact on the retail, banking and property sectors could be serious. The retail sector would be hardest hit. 'Retail sales will continue to go down in the first half [of next year],' Hongkong Bank's Mr Wong said. A poor Christmas and New Year lies ahead for most of the retailers, who have seen little of the usual festive season spending blitz so far. In a typical year, the retailers see an estimated 17 per cent of annual sales during the Christmas-New Year period. But this year, retailers report, sales have failed to rise significantly. A Worldsec Securities retail report said many people were still window-shopping, despite pre-Christmas discounts of up to 60 per cent. Giordano executive director Terry Ng Sze-yuen said sales were still slow. Compared with the pre-crisis Christmas of 1996, sales had dropped 30 to 35 per cent, he said. 'I'm quite pessimistic for the outlook for 1999.' He expected some retailers to make more layoffs in the New Year. The banking sector will also be hurt by increasing unemployment, with non-performing loans (NPLs) continuing to rise. 'We're already seeing some impact on loans,' Mr Xie said. CLSA forecast NPLs would hit a peak of 8 per cent in 2000. They stand at about 2.7 per cent at present, up from 1.4 per cent at the end of last year. The securities house did not expect mortgage defaults to rise greatly. CLSA Hong Kong research head Dio Wong said: 'For Hong Kong people, their lifeblood is their property. If the monthly cash-flow is hit, they'll pull out their savings or get money from relatives [to pay the mortgage].' Warburg Dillon Read chief property analyst Franklin Lam said the property sector would be protected as employment remained strong in certain sectors of the economy. He estimated just 1 per cent of the workforce needed to buy homes for all the empty units to be filled, and that many people were sitting on high levels of cash after selling units last year and waiting for prices to bottom out.