The unemployment rate fell to 4.2 percent last month from 4.3 percent in July, the government said Friday, cautioning that the data don’t warrant automatic optimism over the economy.
The seasonally adjusted data were virtually in line with market forecasts, which ranged from around 4.2 percent to 4.4 percent. Analysts doubt the momentum will be sustained because there are signs that the economy is being dragged down by weaker exports.
The drop in the jobless rate was mainly caused by unemployed people who stopped looking for work, the Internal Affairs and Communications Ministry said.
The improvement “was not caused by rising employment but by people who left the job market, and we need to closely follow future developments,” a ministry official said.
Backing that assessment, the number of those employed dropped by 60,000, or 0.1 percent, to 62.63 million, falling for the second consecutive month, while the ranks of the unemployed dipped by 100,000, or 3.5 percent, to 2.72 million.
The jobless rate for men remained unchanged at 4.5 percent while that for women fell to 3.7 percent from 4.1 percent, with the ministry pointing to increasing payrolls in the medical and welfare industries, as well as the retail and wholesale sectors.
Separate data showed that job availability was flat, according to the Health, Labor and Welfare Ministry, with the ratio of job offers to job-seekers remaining at 0.83 last month — meaning 83 positions were available for every 100 people seeking jobs.
Lee Chiwoong, economist at Goldman Sachs Japan Co., noted the poor showings in both services and manufacturing.
“Given weaker momentum in (domestic) demand from reconstruction work (after the March 2011 disasters), as well as little improvement in overseas demand, I don’t think (new job offers) will increase,” Lee said.
The global economy has been increasingly affected by Europe’s financial crisis, which is causing problems around the globe through trade channels. Japan’s exports to China and other developing economies in Asia have been slowing, weighing down domestic production.
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