Japan January Jobless Rate Dips to Nearly 4-Year Low of 2.4% from Upwardly Revised 2.5% in December Amid Lower Job Cuts, Quits for Other Openings

–Employment Up on Year for 18th Straight Month, Led by Surge in Communications Jobs, Rises at Hotels, Restaurants, Factories

By Max Sato

(MaceNews) – Japanese payrolls posted an 18th straight rise on year amid lingering labor shortages at communications firms, hotels, restaurants and factories, while the unemployment rate fell to a nearly four-year low of 2.4% from 2.5% (revised up from 2.4%) in December, data released Friday 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 for the second month in a row and the number of those who quit to look for other openings dipped after being flat, more than offsetting a rise in the number of those who began looking for work and thus were counted as being unemployed. The number of employed men rebounded while that of women fell sharply. 

In its monthly economic report for February released last week, the government downgraded its overall assessment for the first time in three months, saying while the economy is recovering moderately, consumption has turned weaker amid elevated costs and production has been hit by suspended vehicle output. But 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 January, in line with the median economist forecast of 2.4% (forecasts ranged from 2.4% to 2.5%). It is the lowest since 2.4% in February 2020 and well below the recent high of 3.1% in October 2020 but it remains below the 2.2% seen in December 2019, just before the pandemic triggered a global economic slump.

The jobless rate averaged 2.6% in 2023, unchanged from 2022, when it improved from 2.8% in both 2021 and 2020 but still above 2.4% in the pre-pandemic year of 2019.

Compared to a year earlier, the number of employed rose 250,000 to an unadjusted 67.14 million in January for the 18th straight increase, led by women and both regular and non-regular jobs, as seen in recent months. It followed increases of 380,000 in December, 560,000 in November and 160,000 in October.

The number of unemployed fell 10,000 on the year to an unadjusted 1.63 million in January, after falling 20,000 in December and 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. December’s 1.56 million was the lowest since 1.46 million in December 2019.

The overall employment increase in January from a year earlier was led by a surge in job creation at information communications firms including news media, mobile phone carriers and software developers. The hotels, restaurants and bars category also continued hiring more people to fill vacancies while the number of workers in the manufacturing industry rose for a third straight month but at a slower pace.

Employment in the real-estate and goods leasing category showed a solid gain after rising sharply at the end of the year. There was a pullback in jobs in the medical and welfare category after two months of increase.

On the downside, financial firms cut payrolls from year-earlier levels for the eighth consecutive month. Employment in the wholesale and retail industry fell for the third straight month. The construction industry trimmed jobs slightly on the year in January after adding more in December and shedding in November.