The jobless rate ended last year at 5.3 per cent, remaining unchanged for the third consecutive month in a sign that Hong Kong's unemployment problem is increasingly a result of an inherent skills mismatch. The government said the number in work rose by about 13,000 month on month to a record of more than 3.43 million. The labour force grew by 5,200 to more than 3.61 million, leaving around 182,000, or 7,800 fewer workers, without jobs during this period. The December jobless rate, although maintaining a four-year low, disappointed economists expecting a slight improvement to 5.2 per cent. Latest Census and Statistics Department figures show manufacturing, hotel, transport and sanitary services sectors mainly experienced falls in unemployment. But amusement, recreational and medical services industries suffered rises. The underemployment rate, an indicator of job seekers unable to find enough work, worsened marginally to 2.5 per cent from 2.4 per cent a month earlier. The main sectors affected were the restaurant and transport trades. A government spokesman said labour demand was expected to remain firm in the run-up to the Lunar New Year. 'For 2005 as a whole, the unemployment rate averaged 5.6 per cent, distinctly below the 6.8 per cent in 2004. This was due to a faster growth in total employment than the total labour force, at 2.3 per cent against 1 per cent.' Permanent Secretary for Economic Development and Labour Matthew Cheung Kin-chung was upbeat. He said the unemployment rate would probably remain stable, or even fall slightly, over the next few months. He saw bright prospects for wage increases, especially in the financial sector. However, Standard Chartered economist Tai Hui said the pace of improvement in the jobless rate would be slower this year. 'There is scope for the unemployment rate to fall below 5 per cent, but this will take stronger growth to achieve.' Mr Hui, who expects the jobless rate to average 5 per cent this year, said there were expectations the current cycle of rising US interest rates would peak soon, spurring a mini-revival in the local property market. He also pointed to higher demand in the services sector. Last year, the Labour Department staged 12 large-scale and 46 district-specific job fairs. This will increase to 13 large-scale and 50 district fairs this year.