Japan’s job availability hits record high but unemployment rate remains flat

Kyodo

The nation’s labor market remained tight in April as job availability rose to the highest level in over 24 years and the unemployment rate remained flat at 3.2 percent, government data showed Tuesday.

The ratio of job offers to applicants rose to 1.34 in April, the highest since November 1991, the Ministry of Health, Labor and Welfare said. This means that 134 positions were available for every 100 job-seekers.

“The employment situation remains on an improving trend,” a government official said.

The unemployment rate for men remained flat at 3.4 percent, while that for women was unchanged at 3 percent.

The number of unemployed people stood at 2.11 million, unchanged from the previous month, while the number of workers inched up 0.3 percent to 64.07 million.

The number of people leaving jobs voluntarily stood at a seasonally adjusted 860,000.

Japan’s economy escaped a recession in the January-March quarter, but economists believe growth lacks vigor despite years of efforts to steer the world’s third-largest economy clear of deflation.

Improving labor market conditions are necessary for wage growth, although analysts say the country needs to address the issue of a mismatch between available jobs and seekers.

Sectors that added more jobs than a year ago included health and welfare, wholesale and retail, and finance and insurance. The manufacturing sector saw a drop.

Prime Minister Shinzo Abe is seen as leaning toward delaying next year’s consumption tax hike amid concerns about the global economic outlook as well as a stagnant domestic economy affected by sluggish consumer spending.

“Economic growth remains unstable and fragile,” said Yasunari Ueno, chief market economist at Mizuho Securities Co., adding that the data on employment and household spending was stronger than expected.

“It’s important for Japan to take economic policy steps from a medium- and long-term perspective,” Ueno said.

He said the country needs a main growth driver.

Average household spending, a key indicator of private consumption, fell a seasonally adjusted 0.4 percent in April from a year earlier to ¥298,520, the Ministry of Internal Affairs and Communications said, beating market forecasts of a faster decline.

Spending on housing, clothing, as well as transportation and communications, fell markedly on a year-on-year basis, while expenditure on education rose.

The income of salaried households gained 1 percent in real terms, to ¥480,098.

The ministry said weakness is seen in household spending, keeping the previous month’s basic assessment intact.

A ministry official who briefed reporters said recent earthquakes that rocked Kumamoto Prefecture had no major impact on household spending on a national level.