The nation’s unemployment rate ticked up to a three-year high in August as more people started to re-enter the labor market in search of work amid increasing economic activity.

The jobless rate rose to 3 percent from 2.9 percent in July, the internal affairs ministry reported Friday, its highest since May 2017. The overall result matched the median forecast from analysts.

Before seasonal adjustment, the number of unemployed people increased 490,000 from a year earlier to 2.06 million. It topped two million for the first time since May 2017.

Separate data from the labor ministry showed that the job availability ratio in August had deteriorated to 1.04 from 1.08 in the previous month, down for the eighth month in a row and marking its lowest level since January 2014. The ratio means there were 104 job openings for every 100 job seekers.

The latest figures suggest more business operators have become unable to maintain their workforce after the virus dented consumption and some were forced to cut operating hours.

Despite a second monthly uptick in the unemployment rate, Japan has suffered far fewer job losses than other major economies during the crisis, as the country is facing severe labor shortages due to its rapidly graying population.

Still, with the mood very downbeat at the small businesses that employ most of the nation’s workers, a solid recovery in hiring could be a long way off. The jobless data showed that more than half a million positions have been lost in the manufacturing sector since the previous year and more than a quarter of a million at hotels and restaurants.

“Unemployment has stayed low largely thanks to government’s big spending to protect jobs,” said economist Azusa Kato at BNP Paribas SA.

“Companies are trying to keep jobs, but they aren’t confident enough to hire more,” she said, adding that the unemployment rate could keep rising as more people return to the labor force to look for work.

Legal precedents protecting full-time workers and big cash buffers on corporate balance sheets have helped prevent more layoffs, along with cheap loans and wage support from the government to keep workers on the payroll.

A solid recovery for the economy and the labor market depends largely on the path of the pandemic.

For export-reliant manufacturers, a resurgence of the virus in Europe and other key markets clouds the outlook. At home, bans on international tourists continue to weigh heavily on hotels and restaurants, where new job offers were down by 49 percent in August compared with last year.

The nonadjusted number of people in work fell from a year earlier for the fifth consecutive month. It dropped 750,000 to 66.76 million, including 29.54 million women, down 480,000.

By industry, the accommodation and restaurant services sector — one of the industries hit hardest by the pandemic — saw the largest fall in its number of workers, losing 280,000 from the previous year to sink to 3.91 million. In the manufacturing sector, the number fell by 520,000 to 10.26 million.

The number of people not in the labor force grew 110,000 from a year earlier to 41.88 million, up for the fifth successive month.

On a seasonally adjusted basis, 710,000 people among those unemployed voluntarily left their jobs, down 10,000 from a month earlier, while 590,000 were laid off, up 30,000, and 530,000 were new job seekers, up 40,000.

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