Japan's unemployment rate was steady at 3.0 in October, unchanged from its September level and matching the consensus forecast. This is the lowest rate since 1995. The unemployment rate has now been at 3.0 percent or 3.1 percent for the last five months, dropping from levels of 3.2 percent and 3.3 percent earlier in the year.
The number of employed persons in October was up 630,000 (1.0 percent) compared with the same month last year, while the number of unemployed persons has fallen by 130,000 (6.3 percent) over this period. Japan's participation rate eased from 60.5 in September (a seven-year high) to 60.4 in October.
Japan's labour market remains in good shape, with high levels of participation a particularly positive sign. Officials at the Bank of Japan have pointed to strength in the labour market as as one of the factors supporting their view that inflation will start to rise once the impact of lower oil prices fades.
The Unemployment Rate measures the number of unemployed as a percentage of the labor force. The unemployment rate is part of the Labour Force Survey which also includes employment data.
The unemployment rate and employment change are carefully monitored. The employment data show the number employment along with the change in employment for the previous year. Monthly changes in employment also help clarify whether businesses are hiring. The unemployment rate is the percentage of the labor force that is unemployed. A lower jobless rate translates into more income earning workers and greater consumption. Increased spending is a positive for consumer oriented economic growth, something that has lagged in Japan.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events.
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