Japan September Jobless Rate Eases to 2.6% from August’s 2.7% as Job Cuts Fall, Fewer People Quit to Look for Better Positions 

–Employment Up Y/Y for 14th Straight Month, Led by Hotels, Restaurants, Construction; Manufacturing Jobs Slump 

–Number of Unemployed Drop After 2 Months of Increase 

By Max Sato

(MaceNews) – Japanese payrolls posted their 14th straight rise on year in September as massive hiring by hotels, restaurants and builders continued mitigating a sharp decline in manufacturing jobs, while the unemployment rate edged down to 2.6%, as expected, after being unchanged in August, data released Tuesday by the Ministry of Internal Affairs and Communications showed.

Compared to the previous month, the number of people who lost their jobs or retired fell sharply for the second straight month and that of those who quit to look for other openings declined after two months of gains. These factors more than offset the impact of a rebound in the number of people who began looking for work, and were thus counted as being unemployed.

The seasonally adjusted average unemployment rate stood at 2.6% in September, after being unchanged at 2.7% in August and unexpectedly rising to the level in July from 2.5% in June. It was in line with the median economist forecast of 2.6% (forecasts ranged from 2.6% to 2.7%).

The latest figure is below 2.8% seen in March but is still above the three-year low of 2.4% hit in January. It remains below the recent high of 3.1% reached in October 2020 but is above 2.2% recorded in December 2019, just before the pandemic triggered a global economic slump.

The jobless rate moved in tight ranges of 2.7% to 3.0% in 2021 and 2.5% to 2.8% in 2022.

In its monthly economic report for October released on Monday, the government maintained its overall assessment, saying the economy is recovering moderately, but warned that consumer inflation is high, labor shortages are broad-based and the war in the Middle East is adding to downside risks to domestic recovery led by wage and income growth. It also maintained its view on employment conditions after upgrading it for the first time in 11 months in June, saying they are “showing signs of improvement.”

Compared to a year earlier, the number of employed rose 210,000 to an unadjusted 67.87 million in September for the 14th straight increase after rising 220,000 in August, 170,000 in July, 260,000 in June, 150,000 in May, 140,000 in April, 150,000 in March and 90,000 in February and surging 430,000 in January.

The number of unemployed fell by 50,000 on the year to an unadjusted 1.82 million in September after rising 90,000 in August and climbing 70,000 for the first rise in three months in July and falling 70,000 in June. It marked its first year-over-year rise in 21 months in March with a 130,000 jump. It has drifted down from a pandemic peak of 2.17 million in October 2020 but is still above 1.60 million at the beginning of 2020.

The overall employment increase in September from a year earlier was led by a continued sharp rise in the hotels, restaurants and bars category, which has benefited from government subsidies for domestic traveling, pent-up domestic demand and a recovering inflow of foreign visitors.

Employment growth picked up in the construction industry while manufacturing jobs posted a sharp drop after marking solid gains through July.

The medical and welfare industry shed workers on year after recent gains from June to August.

Employment in the wholesale and retail industry slowed after sharp gains in the previous two months. Financial firms and the real-estate and goods leasing industry continued to trim payrolls from year-earlier levels.