July unemployment unchanged at 5.4%

Japan’s unemployment rate remained unchanged at 5.4 percent in July for the third consecutive month, the government said Friday.

The latest overall reading remains just below the record high 5.5 percent recorded in December.

“The nation’s employment situation remains severe,” said Masato Chino, an official at the Statistics Bureau of the Ministry of Public Management, Home Affairs, Posts and Telecommunication.

The number of people without jobs climbed by 220,000 from a year earlier to 3.52 million in July, up for the 16th straight month, the public management ministry said in a preliminary report.

The unemployment rate for men came to 5.5 percent, unchanged from June, while that for women was 5.2 percent, also unchanged, the ministry said.

The number of jobless people who received insurance benefits rose 3.4 percent from a year before to a record 1,177,000, reflecting the increased unemployment of middle-aged people due to corporate restructuring.

Economists expressed pessimism about the future course of Japan’s labor market.

Nobuhiko Kuramochi of Shinko Research Institute said manufacturers’ recovery momentum may have weakened recently, as indicated by a 0.4 percent drop in July industrial output for the second consecutive month of decline.

“Given continuing business moves to cut workers, we are not in a situation that warrants optimism,” he said.

The ratio of job offers to job seekers meanwhile improved 0.01 point from June to a seasonally adjusted 0.54 in July, meaning there were 54 job offers for every 100 job seekers, the Health, Labor and Welfare Ministry said in a separate report released the same day.

The ratio improved for the first time since May, with job offers increasing 4 percent and job seekers rising 1.6 percent from June, the labor ministry said.

The public management ministry said there were two slight improvements concerning the numbers of jobless breadwinners and employed people.

The number of breadwinners without jobs came to 900,000 in the reporting month, lower than the roughly 1 million registered every month since last October.

The number of people employed decreased by 110,000 from a year before, but the drop was much less than the more than 500,000 reported every month on the year between last September and June.

By industry, construction workers shrank for the 20th straight month of year-to-year falls, while manufacturers decreased for the 15th month.

“Statistics about production have been suggesting a pickup, but this has yet to bring about an increase in the number of workers,” Chino said.

He said the labor survey suggests employers are opting to “make current employees work longer, rather than hiring more people,” as the number of people who work more than 49 hours a week increased, while the number of those who worked less fell.

Compared with other major nations, Japan’s 5.4 percent jobless rate is lower than July’s readings of 5.9 percent in the United States, 7.6 percent in Canada and 9.9 percent in Germany, but higher than the 3.1 percent in Britain and 3 percent in South Korea.

Firm failures take toll

A total of 18,425 workers lost their jobs as a result of bankruptcies in July, up 6.6 percent from the same month a year earlier, according to data compiled by Tokyo Shoko Research Ltd.

The construction sector accounted for 6,484 of the total — the highest amount, at 35.1 percent — reflecting the failure of Dai Nippon Construction, a medium-size Gifu-based contractor affiliated with Kinki Nippon Railway Co.

The private credit research agency compiled the data on bankruptcies with liabilities of 10 million yen or more.

The manufacturing sector accounted for 4,378, at 23.7 percent, the second-highest, followed by 2,939 in the wholesale sector, accounting for 15.9 percent, and 877 among retailers, 4.7 percent.

In July, 1,718 companies went bankrupt, the highest number in Japan since the war, with liabilities totaling 1.16 trillion yen.