The nation’s unemployment rate worsened to 3.1% in October, its highest level in over three years, as the coronavirus pandemic continues to cast a pall over the labor market, government data showed Tuesday.
The job availability ratio, however, marked its first improvement since April 2019, the Ministry of Health, Labor and Welfare said, as hiring picked up despite persisting uncertainty over the economic outlook.
The ratio rose to 1.04 from 1.03 in September, meaning that there were 104 job openings for every 100 job seekers.
The jobless rate last stood at 3.1% in May 2017.
The jobless rate for men rose to 3.4% on a seasonally adjusted basis, up 0.2 point from the previous month, while that for women was unchanged at 2.7%, according to the Ministry of Internal Affairs and Communications.
The recent batch of data for October, including industrial output, points to a continuing economic recovery after the pandemic caused the worst-ever quarterly contraction for Japan in the April-June period.
However, a resurgence of coronavirus cases is beginning to raise uncertainty over the outlook for the world’s third-largest economy while other countries also struggle to contain the spread of the virus.
The government has provided support to companies struggling amid the pandemic by trying to keep workers employed through the payment of subsidies, which economists say has shielded the labor market from a more serious hit.
The subsidy program is expected to be extended to February as part of an extra budget for the current fiscal year through next March.
The total number of unemployed people increased by 80,000 to 2.14 million as the nation had 66.58 million, up 30,000, on payrolls.
Separate government data released Tuesday showed that corporate profits in Japan marked a double-digit year-on-year drop for the third straight quarter in the July-September period as companies grappled with the pandemic.
Pretax profits of domestic companies covered in the Finance Ministry’s survey for the three-month period plummeted 28.4% from a year earlier to ¥12.40 trillion ($120 billion), down for the sixth quarter in a row.
However, following a wide-scale resumption of economic activity the decline was smaller than the 46.6% slump in the previous quarter, the largest since the April-June quarter of 2009 when there was a 53.0% fall in the aftermath of the global financial crisis.
Capital spending by all nonfinancial sectors for purposes such as building factories as well as adding equipment and software fell 10.6% percent to ¥10.80 trillion.
The figure in the April-June period plunged 11.3%, the sharpest on a year-on-year basis since the January-March period of 2010 when the figure dived 11.5%.
Taking into account the latest capital spending figures, the Cabinet Office is scheduled to release revised gross domestic product data for the third quarter of 2020 on Dec. 8. Preliminary data showed the country’s economy grew an annualized real 21.4% from the previous quarter.
Japan declared a state of emergency over the virus in early April, asking people to stay at home and for nonessential businesses to suspend operations. The nonbinding requests weighed heavily on the world’s third-largest economy and were fully lifted in late May.
Economic activity has been resuming gradually since then, but concerns are growing that a recent resurgence of virus cases may again dampen consumption.
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