Japan's jobless rate unexpectedly fell to 2.6% in March, hitting the lowest rate since April 2020, although the number of furloughed workers remained high due to effects of the pandemic, official data showed Tuesday.
The world's third-biggest economy has been struggling to achieve a sure-footed recovery from the COVID-19 pandemic, with the Ukraine war adding to the growing risks.
The data showed some resilience in the labor market, however. The seasonally-adjusted unemployment rate was lower than the median forecast for 2.7% in a Reuters poll of economists, which was also the reading in February.
Compared with a month earlier, the number of workers increased by 180,000, while the figure for those unemployed decreased by 90,000 in March, the data showed, after adjusting for seasonality.
"The drop in unemployment rate indicates signs of recovery" in the labor market, a government official told a media briefing.
"But the impact of the pandemic appears to be lingering and requires close attention," he added, referring to the number of furloughed workers, which remained as high as 2.43 million in March, with such individuals primarily found in face-to-face service sectors.
The jobs-to-applicants ratio was 1.22 in March, labor ministry data showed, in line with a Reuters poll forecast and rising 0.01 point from the previous month's 1.21.
The job-to-applicant ratio for the year through March rose 0.06 point to 1.16, according to the labor ministry. The ratio means there were 116 job openings for every 100 job seekers.
But the figure was still low compared with pre-pandemic levels, which registered 1.55 in the fiscal year through March 2020, before the economy was affected by the emergence of the pandemic.