Japan May Jobless Rate Steady at 2.6% for 3rd Straight Month; Job Cuts Steady, More People Join Market Looking for Work

–Employment Up Y/Y for 22nd Straight Month, Led by Retailers, Hotels, Restaurants; Manufacturers Shed Jobs for 3rd Month in a Row
–Number of Unemployed Up Y/Y for 2nd Straight Month

By Max Sato

(MaceNews) – Japanese payrolls posted their 22nd straight rise on year in May amid labor shortages at retailers, hotels and restaurants while the unemployment rate was unchanged at 2.6% for the third 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% while others had forecast a slight uptick to 2.7%. The 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.

Compared to the previous month, the number of people who lost their jobs or retired was unchanged in May after falling 4.3% in April for the first fall in three months. The number of those who quit to look for better positions fell 3.8% after marking the first drop in three months in April with a 1.3% fall. The number of those who began looking for work and thus were counted as being unemployed rose 2.0% after rising at the same rate the previous month. Tight labor conditions and rising wages are encouraging people to join or return to the workforce.

From a year earlier, the number of employed rose 210,000 to an unadjusted 67.66 million in May for the 22nd straight increase, led by a sharp rise among women that more than offset a slight drop in men. Regular jobs rose on year for the seventh straight month while non-regular jobs dropped after recent sharp gains. It followed increases of 90,000 in April, 270,000 in March and 610,000 in February.

The number of unemployed rose 50,000 on the year to an unadjusted 1.93 million in May, after rising 30,000 in April, falling 80,000 in March and rising 30,000 in February. 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 May from a year earlier was led by sharp gains among the wholesale/retail industry, the hotels, restaurants and bars category and education support providers. Job creation at information communications firms including news media, mobile phone carriers and software developers slowed after higher growth. 

The construction industry posted the second consecutive year-on-year rise but the number of workers in the manufacturing industry fell for the third straight month. Employment fell slightly at medical and welfare service providers after solid gains.

In its monthly economic report for June released Thursday, the government maintained its overall assessment, saying the economy is recovering “moderately” and likely to stay on course pinning its hopes on more widespread wage hikes and stimulative effects of planned energy subsidies and cash handouts aimed at easing the pain of pensioners and low-income earners hard hit by elevated living costs. It also repeated that employment conditions are “showing signs of improvement.”