Japan April Jobless Rate Steady at 2.6% for 2nd Straight Month; Job Cuts Shrink, Fewer People Quit for Other Openings

–Employment Up Y/Y for 21st Straight Month, Led by Hotels, Restaurants; Manufacturing Shed Jobs for 2nd Month in a Row

By Max Sato

(MaceNews) – Japanese payrolls posted their 21st straight rise on year in April amid labor shortages at hotels, restaurants and telecommunications firms while the unemployment rate was unchanged at 2.6% for the second month in a row after rising to the level in February from a nearly four-year low of 2.4% in January, data released Friday by the Ministry of Internal Affairs and Communications showed.

The seasonally adjusted jobless rate of 2.6% in April was in line with the median forecast of 2.6% (some had expected a slight improvement to 2.5%). The January rate was the lowest since 2.4% in February 2020.

Compared to the previous month, the number of people who lost their jobs or retired fell 4.3% in April for the first fall in three months after rising 4.5% in March. The number of those who quit to look for better positions also marked the first drop in three months, down 1.3%, after rising 2.6%. The number of those who began looking for work and thus were counted as being unemployed rose 2.0% after being flat and rising in the previous two months amid tight labor conditions and rising wages.

In its monthly economic report for May released last week, the government maintained its overall assessment, saying the economy is recovering moderately backed by a high pace of wage hikes amid widespread labor shortages. It also repeated that employment conditions are “showing signs of improvement.”

The latest unemployment rate is below the recent high of 3.1% in October 2020 but there is still some room for improvement toward 2.2% seen in December 2019, just before the pandemic triggered a global economic slump.

The jobless rate averaged 2.6% in fiscal 2023, unchanged from fiscal 2022, when it improved from 2.8% in fiscal 2021 and 2.9% in fiscal 2020 but still above 2.3% in the pre-pandemic year of fiscal 2019, which was the lowest since 2.2% in fiscal 1992.

Compared to a year earlier, the number of employed rose 90,000 to an unadjusted 67.50 million in April for the 21st straight increase, led by a sharp rise among women that offset a slight drop in men. Non-regular jobs continued to mark sharp gains. It followed increases of 270,000 in March, 610,000 in February and 250,000 in January.

The number of unemployed rose 30,000 on the year to an unadjusted 1.93 million in April, after falling 80,000 in March, rising 30,000 in February and falling 10,000 in January. It has drifted down from a pandemic peak of 2.17 million in October 2020. December’s 1.56 million was the lowest since 1.46 million in December 2019.

The overall employment increase in April from a year earlier was led by a surge in the hotels, restaurants and bars category. There was also continued job creation at information communications firms including news media, mobile phone carriers and software developers.

Education support service providers showed a gain after a fall in March. The construction industry also rose slightly after falling in the previous three months.

On the downside, the number of workers in the manufacturing industry fell for the second straight month after slumping in March to post the first drop in five months. The real-estate and goods leasing category was flat after shedding jobs for the second straight month.