Hong Kong's jobless rate has risen to 5.3 per cent, the highest level in 41 months, but the increase was the mildest since the financial slowdown began in September. The unemployment rate for the February-April period stood at 5.3 per cent, up from 5.2 per cent for the first three months of the year, Labour secretary Matthew Cheung Kin-chung said. The number of unemployed people rose by 9,700, to 196,900. 'But the 0.1 increase is relatively mild when compared with the increase in the past two months,' Mr Cheung said, adding it was also the mildest since the financial tsunami began in September last year. According to the figures released yesterday, the underemployment rate rose from 2.1 per cent in January-March to 2.2 per cent in February-April. Total employment - the number of people with jobs - dropped by 5,500, from 3,507,600 in January-March to 3,502,100 in February-April. The labour force - the number of people in work plus those wishing to be but who are unemployed - increased by roughly 4,100, to an all-time high of 3,699,000. Jobs were lost mainly in construction, food services and manufacturing, while the underemployment increases were seen largely in construction and wholesale businesses. 'The global economy is undergoing the most serious recession in 60 years. Hong Kong cannot stay out of this. Although there were signs that the rise in the unemployment rate was tapering, labour market conditions remained slack,' Mr Cheung said. The unemployment rate was expected to remain high in the short term as labour market demand remained weak under the deepening impact of the economic recession. Swine flu was also creating uncertainty and putting pressure on the labour market, he said. The worsening conditions in the job market came as the General Chamber of Commerce warned of more economic hardship. Chief economist David O'Rear now predicts gross domestic product will contract 4.5 per cent this year. In January he said GDP would contract 2 per cent. But Hong Kong may experience some growth this year, possibly in the fourth quarter, he said. A source said the chamber was calling on the government to scrap provisional 2009/10 taxes on both salaries and profits, extend the deadline for making final tax payments by a few months and to suspend all fees and charges for at least 12 months. The cost of such relief would easily be covered by the almost HK$500 billion in fiscal reserves, the source said. The financial secretary has said more measures to boost business and jobs will come within a month.