–Employment Posts 1st Y/Y Drop in 4 Months, Led by Wholesalers, Retailers, Manufacturing
–Number of Unemployed Marks 13th Straight Y/Y Drop But Still Above January 2020 Level
–Unemployment at 2.6% from May to July Vs. April’s 2-Year Low 2.5%
–Fewer Job Losses M/M in July While More People Seek Other Openings
By Max Sato
(MaceNews) – Japanese payrolls posted the first year-over-year drop in four months in July but the unemployment rate stood unchanged at a relatively low 2.6% as the government has refrained from imposing public health restrictions despite a resurgence in Covid cases since late July data released Tuesday by the Ministry of Internal Affairs and Communications showed.
The seasonally adjusted average unemployment rate stood at 2.6% in July, the same as in June and in line with the median economist forecast, after rising to the level in May. It compares with 2.5% in April (the lowest since 2.4% in February 2020), 2.6% in March, 2.7% in February and 2.8% in January. The jobless rate moved in a tight range of 2.7% to 3.0% last year.
The latest figure is below the recent high of 3.1% hit in October 2020 but still above 2.2% recorded in December 2019, just before the pandemic triggered a global slump.
The number of employed stood at a seasonally adjusted 67.34 million in July, up just 20,000 from June, when it rose 120,000 (+0.2%) on the month. The number of unemployed fell by 40,000 (-2.2%) to an adjusted 1.76 million after being unchanged the previous month.
The number of people who left for other openings rose 20,000 (+2.7%) in July after falling 60,000 (-7.6%) while the number of those who lost their jobs or retired dipped 30,000 (-6.5%) after falling 20,000 (-4.2%) the previous month. The number of people who began looking for work was unchanged after slipping 10,000 (-2.2%) the previous two months.
Compared to a year earlier, the number of employed edged down 20,000 to an unadjusted 67.55 million in July. It was the first drop in four months after rising 210,000 in June, 170,000 in May and 240,000 in April, which was the first rise in seven months.
The number of unemployed fell 170,000 on the year to an unadjusted 1.76 million in July, marking the 13th straight month of decline after a decrease of 210,000 the previous month. 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 employment decrease from a year earlier was led by the wholesale and retail industry as well as manufacturers and construction firms amid supply bottlenecks and high producer costs. Those sectors have been shedding payrolls for months.
In contrast, information and telecommunications service providers and the medical and welfare category continued hiring more workers. Employment at hotels, restaurants and bars posted the first year-over-year gain in three months as people felt comfortable about traveling and dining out until another Covid spike hit late in the month.
Japan’s government has maintained its economic overview after upgrading it last month, indicating consumption is leading a pickup in domestic demand amid a spike in Covid cases while firms are keen to invest in equipment for streamlined and greener operations, according to its monthly report released Thursday by the Cabinet Office.
At the same time, the government pointed to a clearer downside risk from slowing growth in the U.S. and other major economies in the face of continued credit tightening by many central banks. It also cautioned against the impact of rising costs for both households and businesses.
In the report, the government maintained its assessment on employment conditions after upgrading it last month, saying they are “picking up.”
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Contact this reporter: max@macenews.com
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