• Kyodo


Job availability improved for a fifth consecutive month to a 43-year high while the unemployment rate remained unchanged in July, government data showed Tuesday, highlighting Japan’s ongoing labor shortage issue.

The job availability rate rose to 1.52 positions per job seeker in July, up from 1.51 a month earlier, marking the highest level since February 1974, according to the Health, Labor and Welfare Ministry.

The jobless rate stood at 2.8 percent in July, unchanged from the previous month, according to the Internal Affairs and Communications Ministry.

But average monthly household spending, a key indicator of private consumption, fell 0.2 percent from a year ago to ¥279,197, even though the internal affairs ministry maintained that a recovery trend remains in place.

The data painted a mixed picture of the economy, which grew an annualized real 4.0 percent in the April-June quarter as consumers and companies stepped up spending. Economists remain skeptical about such high growth levels when driven by domestic demand.

“Companies are facing labor shortages,” said Yusuke Shimoda, senior economist at the Japan Research Institute. “When you look at the improving job-to-applicant ratio, it indicates that there are more job openings not being filled.”

As the government has been encouraging more people, particularly women, to join the workforce, the unemployment rate for women fell 0.2 percentage points to 2.5 percent, the lowest since 1993. The rate for men rose 0.2 points to 3.1 percent.

The internal affairs ministry kept its view that employment conditions are improving steadily.

The number of unemployed people increased a seasonally adjusted 0.5 percent, or 10,000, from the previous month to 1.90 million. The country had 65.45 million workers in July, up 140,000, or 0.2 percent, according to the internal affairs ministry.

The economy has yet to emerge from deflation despite years of Abenomics, the economic policy mix by Prime Minister Shinzo Abe that includes bold monetary easing by the Bank of Japan.

Economists say a tight labor market should encourage pay raises as companies seek to secure labor. So far, growth in real wages has been tepid.

The average income of salaried households with two or more people gained 3.5 percent from a year earlier to ¥598,042, up for a second straight month.

“We have seen some positive moves in terms of wage growth, albeit at a very moderate pace, and this is helping consumption,” Shimoda said. “That being said, it still lacks strength.”

In July, spending on education, health care and medical services, and housing dropped. Consumers increased spending on transportation and communications services, as well as cloths and shoes, the data showed.

Looking ahead, the impact of unfavorable weather conditions in August on private consumption will be watched closely, according to economists.

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