Japan December Jobless Rate Edges Down to 11-Month Low of 2.4% from 2.5% in November on Sharp Drop in Job Losses, Retirements

–December Also See Fewer Quits for Other Openings, Fewer New Job Seekers
–Employment Up on Year for 17th Straight Month, Led by Factories, Hotels and Restaurants
–Number of Unemployed Falls to Pre-Pandemic Level

By Max Sato

(MaceNews) – Japanese payrolls posted a 17th straight rise on year amid widespread labor shortages at factories, hotels, restaurants and communications firms, while the unemployment rate edged down to an 11-month low of 2.4% from 2.5% in November, with the number of unemployed hitting a four-year low, 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 dropped sharply after surging in the previous month. The number of those who quit to look for other openings fell for the second straight month and there were also fewer new job seekers. The number of employed men slumped while that of women rose slightly after surging in November. 

In its monthly economic report for January released last week, the government maintained its overall assessment for the second month in a row, saying the economy is recovering moderately with some soft spots, but warned that the powerful New Year’s Day earthquake in the northwestern region of Hokuriku has reduced electronic parts supply and battered tourism. It kept its view on employment conditions that they are “showing signs of improvement.”

The seasonally adjusted average unemployment rate stood at 2.4% in December, down from November’s 2.5 and slightly better than the median economist forecast of 2.5% (forecasts ranged from 2.4% to 2.6%). It is the lowest since 2.4% seen in January 2023, which was a three-year low. The jobless rate moved in a relatively tight range of 2.4% to 2.8% in 2023. The average rate for the year was 2.6%, unchanged from 2022, when it improved from 2.8% seen in both 2021 and 2020 but still above 2.4% in the pre-pandemic year of 2019.

The latest figure is well below the recent high of 3.1% reached 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 a year earlier, the number of employed rose 380,000 to an unadjusted 67.54 million in December for the 17th straight increase, led by women and both regular and non-regular jobs, as seen in recent months. It followed increases of 560,000 in November, 160,000 in October and 210,000 in September.

The number of unemployed fell 20,000 on the year to an unadjusted 1.56 million in December, after rising 40,000 in November for the first rise in three months. It has drifted down from a pandemic peak of 2.17 million in October 2020 to below 1.60 seen at the start of 2020. It is now the lowest since 1.46 million in December 2019.

In the whole of 2023, the number of employed rose for the third straight year and the number of unemployed declined for the second year in a row.

The overall employment increase in December from a year earlier was led by second monthly sharp gains in the manufacturing industry and information communications firms including news media, mobile phone carriers and software developers.

The hotels, restaurants and bars category continued to raise payrolls as people have been traveling and eating out more freely without causing a spike in Covid infections. The construction industry increased hiring on the year after shedding previously. Employment in the real-estate and goods leasing category jumped after posting modest gains in the previous two months.

On the downside, financial firms cut payrolls from year-earlier levels for the seventh consecutive month. Employment in the wholesale and retail industry also fell after marking the first year-over-year decline in seven months in November.