Hong Kong's unemployment rate dipped to a 52-month low of 5.2 per cent last month, the government reported yesterday. But behind the impressive headline figure, down from 5.3 per cent in December, the news on the unemployment front was not so good, as the drop in the jobless rate was accounted for by the reduction in the labour force. There were 174,000 people without jobs last month, about 8,000 fewer than in December, the government said. It is the first time the number of unemployed has fallen below 180,000 since August 2001. But unlike December, when the number of people in work reached a record high, last month the total employed population shrank by about 4,500 to almost 3.43 million. The labour force also declined by 12,400 month on month, to just over 3.6 million. Chief Secretary Rafael Hui Si-yan was not complacent about the drop in unemployment, which was in line with consensus estimates. Addressing the Employers' Federation of Hong Kong, he said the jobless rate 'is still relatively high'. 'Tackling unemployment will remain a long-term challenge for all of us. Our unemployment problem is both cyclical and structural,' Mr Hui said. JP Morgan economist Daniel Hui Pai-yi shrugged off the lower employment figure as being due to seasonal factors. 'I expect continued incremental improvement in overall labour market conditions,' he said. A government spokesman said: 'It is customary for many business establishments to review and, if necessary, adjust their staffing position shortly after the Lunar New Year holidays. Whether unemployment will continue to decline in the short term is thus dependent upon the results of such a review.' The underemployment rate, which measures those who cannot find more than 35 hours per week, also declined slightly to 2.4 per cent, from 2.5 per cent.