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Jobless rate rises to 3.8% on July surge in job-seekers

Kyodo

The unemployment rate rose to 3.8 percent in July from 3.7 percent in June as more people began looking for jobs to tap an apparent upturn in the economy, the government said Friday.

The unemployment rate for women rose 0.2 point from June to 3.7 percent, while the rate for men stayed flat at 3.8 percent, the Internal Affairs and Communications Ministry said. The monthly uptick in the jobless rate is the second straight.

The number of jobless people surged 40,000 from June to 2.48 million as the number of people who lost their jobs rose 30,000 to 750,000 and those who quit sank 30,000 to 890,000, the ministry said.

It also said those who began seeking work anew jumped 50,000 to 780,000.

By sector, the wholesale and retail sales industry and consumer-related services such as entertainment, cut jobs from a year earlier.

The construction, and the information and communications, sectors meanwhile added jobs.

“More people usually try to join the job market when the economy is recovering and this pushes up the jobless rate. The labor market is still on a recovery track,” a ministry official said.

Separate data released by the labor ministry showed that job availability was flat from June. The ratio of job offers to job-seekers stayed at 1.10 in July, which means 110 positions were available for every 100 job-seekers.

The economy has taken a blow from the consumption tax hike to 8 percent on April 1, which stifled private spending and industrial production. If the downturn lingers and domestic demand continues to shrink, sales will become more sluggish and corporate profits will drop, which might make companies reluctant to boost employment, some analysts said.

“With the consumption tax hike darkening the economic outlook, the pace of improvement in the labor market is expected to slow down the road,” said Yoshiki Shinke, chief economist at the Dai-ichi Life Research Institute.

Thanks to the tax hike, the economy shrank by an annualized real 6.8 percent in the April-June quarter, falling at the fastest pace since the devastating natural and man-made disasters in 2011, the government said earlier this month.

Some experts, meanwhile, forecast that the economy is unlikely to recover in the July-September quarter at a pace that can offset the plunge in the previous quarter.

The Japan Center for Economic Research said Aug. 12 that gross domestic product is predicted to rebound only by an annualized 4.1 percent in real terms in the July-September quarter, citing the average projection of 42 private-sector economists.