The unemployment rate fell in September for a second straight month as lower wages prompted stores and transport companies to hire more workers, while strong mainland exports underpinned job creation. The rate fell to 7.4 per cent in September, down from 7.6 per cent in August and 7.8 per cent in July - the highest rate since records began in 1981. The 7.4 per cent rate is a seasonally adjusted three-month average for July to September. Analysts - pointing to worsening personal bankruptcies which last month hit another record - warned the small decline in the jobless rate did not signal a return to high employment levels. Last month, 2,580 people were declared bankrupt, nearly triple the amount from the same month last year. The number of people petitioning for bankruptcy from January to September hit 19,949, a 90 per cent increase from last year. But bankruptcy petitions fell 12 per cent last month from August, suggesting the worst may be over. Paul Cavey, Greater China economist with the Economist Intelligence Unit, said of improving job prospects: 'It shows the slow, weak recovery is continuing, as export performance did pick up in the third quarter, and that plays into the employment situation. 'Employment grew month on month which is a good thing, but the overall picture remains fairly weak,' he said, pointing out the total number of people employed grew to 3.243 million last month from 3.233 million in August. The number of people out of work was 267,000, while the underemployment rate - a measure of those forced to work less than 35 hours a week - was unchanged at 2.9 per cent. Financial Secretary Antony Leung Kam-chung said yesterday: 'With the uncertainty surrounding whether there will be a war [in Iraq] or whether there will be additional uncertainties due to terrorist acts, it is quite difficult to predict. But the government will try to improve the export sectors as well as other sectors.' Secretary for Economic Development and Employment Stephen Ip Shu-kwan said the decline came amid healthy growth in air and sea transport and an increase in tourist visitors last month. The government said outdoor dining in Sai Kung, fishing charters and the opening of Sheung Wan Gala Point helped create 1,500 new jobs. Real estate, import/export companies and decoration and maintenance businesses also added jobs. Falling wages played a part in job creation, because as unemployment hits record highs, wages fall, making it cheaper for companies to hire, said Francis Lui Ting-ming, director of the Centre for Economic Development at the Hong Kong University of Science and Technology. Confederation of Trade Unions chairman Lau Chin-shek said the fall did not mean the situation of workers had improved. Instead, the trend to more self-employed and temporary workers meant they were losing their labour protection. 'Most of the government-engineered job relief measures are really temporary and can only ease unemployment for a while,' he said. 'The government should put in greater efforts to create more long-term and stable jobs.' The outlook for jobs and the economy depended on the US, Mr Lui said. 'If the US economy continues to drag along at the recession level, that will hurt Hong Kong's exports, lower share prices and definitely hurt consumer sentiment.' Hong Kong's slumping economy also caused a rise in bankruptcy applications, and the number for the year to October 'will likely be more than 20,000, assuming the number of petitions to be submitted this month would be in line with those received in September', an Official Receiver's Office spokesman said. Petitioners need to wait several months for the court to grant bankruptcy. Chan Kam-lam, economic affairs spokesman of the Democratic Alliance for Betterment of Hong Kong, said the government should tighten the law to ban people from using bankruptcy to avoid repaying debts. The law was relaxed on April 1, 1998, to shorten the restriction period to four years from seven years, during which those declared bankrupt could not operate a business or travel. The shorter restriction period prompted more people to petition for bankruptcy, Mr Chan said. Graphic: JOBB22GET