Business / Economy

Japan's jobless rate jumps to 2.4% in January, rising for first time in four months

Kyodo, Reuters

Japan’s unemployment rate rose 0.2 percentage point from the previous month to 2.4 percent in January, worsening for the first time in four months but still at a low level amid the country’s chronic labor shortage, government data showed Friday.

The seasonally adjusted number of unemployed in the reporting month increased 120,000, or 7.9 percent, from a month earlier to 1.64 million, partly due to a rise in the number of midcareer job-seekers, according to the Ministry of Internal Affairs and Communications.

Among them, 720,000 people voluntarily left their jobs, up 90,000 from the previous month; 370,000 were laid off, up 30,000; and 400,000 were new job-seekers, up 20,000.

Separate data from the Ministry of Health, Labor and Welfare showed that the job availability ratio in January stood at 1.49, down from 1.57 in December and falling below the 1.50 threshold for the first time in 32 months. The ratio means there were 149 job openings for every 100 job-seekers.

Some employers did not recruit in January due to the introduction of more cumbersome paperwork. From the reporting month, employers were required to fill in 26 new items in their job-offer forms, according to the labor ministry.

Taro Saito, executive research fellow at the NLI Research Institute, said the negative effects of the COVID-19 outbreak on sectors such as accommodation, restaurants and tourism could lead to many corporate bankruptcies in the next few months, which could sharply raise the number of those unemployed.

“Even in the earliest scenario of an end of the virus outbreak around spring, I guess the number of people without jobs could increase in the coming months,” he said.

Meanwhile, factory output rose more than expected in January, providing some relief for policymakers, amid heightened risks of a recession as the virus outbreak in China disrupts supply chains and business activity.

The world’s third-largest economy shrank at the fastest pace in almost six years in the December quarter, as a nationwide tax hike hurt business and consumer spending and soft overseas demand hit exports.

Official data on Friday showed factory output rose 0.8 percent in January from the previous month, a faster expansion than the 0.2 percent gain in a Reuters forecast, and following a downwardly revised 1.2 percent rise in the previous month.

That offers some good news as policymakers face pressure to boost growth and offset the fallout from COVID-19, which has disrupted economic activity in China.

Manufacturers across Japan rely heavily on customers in China, the world’s second-biggest economy, to buy their products — especially the parts and equipment that are supplied to China’s factory floor.

“Output activity (in Japan) will likely slow down until the spread of infection is over,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“Although production in China has restarted following the Lunar New Year, it will take time for output ratios to recover.”

If infections can be contained, output should start picking up in April, said Minami. Under a worst-case scenario, that may not happen until summer.

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