The seasonally adjusted unemployment rate hit a nine-year low of 3.8 percent in April, down from 4.0 percent in March, the government said Tuesday, indicating an improving labor market amid the longest economic boom in the postwar period.
The jobless rate was the lowest since March 1998, when it also logged 3.8 percent, the Internal Affairs and Communications Ministry said in a preliminary report.
After hovering in a tight range of 4.0 to 4.2 percent for the 13th straight month since February 2006, the jobless rate finally slipped below 4.0 percent due mainly to an improvement in the labor market for younger people, a ministry official said.
“Behind the improvement in the jobless rate was a fall in the jobless rates for males and females aged 15 to 24,” the official said.
The unemployment rate for males in that age category fell 1.7 percentage points to 8.0 percent from a year earlier and that for females was 6.9 percent, down 1.3 points.
The April data suggest that graduates from universities and high schools are having an easier time finding jobs, he said.
Economists said the better than expected jobs market data will encourage the Bank of Japan to consider raising the interest rate in the near future.
“The outcome was a surprise and will definitely prompt the BOJ to seek the next interest hike at an early date as the central bank can argue that the tightening labor market means price rises ahead,” said Takehiro Sato, chief economist at Morgan Stanley Japan Ltd.
BOJ watchers are divided over when the central bank will hike the interest rate. Some expect it will happen in the July-September period and others believe it will happen later in the year or even next year.
The central bank raised the key short-term interest rate to 0.50 percent from 0.25 percent in February. BOJ Gov. Toshihiko Fukui and most of his fellow board members have shown a willingness to gradually raise interest rates despite recent drops in consumer prices.
Morgan Stanley’s Sato said that because the 0.2-point month-on-month drop in the unemployment rate was a bit sharp, it is possible the jobless rate will fluctuate over the short term.
“But the jobless rate is likely to gradually move toward the mid-3.0 percent level,” he said.
Takuji Aida, chief economist at Barclays Capital Japan Ltd., said it appeared companies have accelerated their efforts to boost employment since the new business year began for most companies on April 1.
“With a strong sense of a labor shortage, companies are also trying to secure workers by increasing the percentage of regular employees,” Aida said, adding wages are expected to rise on the back of the improving labor market.
The number of regular employees expanded 800,000 in April from the previous year to 47.54 million, up for the 26th month.
The number of jobless people declined 160,000 from a year before to 2.68 million for the 17th consecutive monthly fall.
The jobless rate for men dipped to 4.0 percent, down 0.1 point from March, while the rate for women lost 0.3 point to 3.6 percent.
In a separate report, the Health, Labor and Welfare Ministry said the ratio of job offers to job seekers came to 1.05 in April on a seasonally adjusted basis, up from 1.03 in March. The figure means there were 105 jobs available for every 100 job seekers.
The number of job offers shrank 0.6 percent in April from the previous month, while that of job seekers dropped 2.5 percent, the labor ministry said.
The number of new job offers dipped 3.3 percent from a year earlier.
According to the Internal Affairs and Communications Ministry, the number of job holders grew 760,000 in April from a year earlier to 64.44 million, up for the seventh month in a row.
The number of male job holders came to 37.65 million, up 340,000 from the previous year and the number of female workers climbed 420,000 to 26.79 million.
The number of people who quit their jobs dropped to 970,000, down 60,000 from a year earlier.
The number of people dismissed from their jobs declined 110,000 from the previous year to 580,000.
By industry, the number of job holders expanded in the manufacturing, transport, and medical and welfare sectors but dropped in the construction and services sectors.
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