Japan's unemployment rate was steady at 3.1 percent in December, unchanged from the November level and in line with the consensus forecast. The unemployment rate has now been at 3.0 percent or 3.1 percent for the last seven months, dropping from levels of 3.2 percent and 3.3 percent earlier in the year.
The number of employed persons in December was up 810,000 (1.3 percent) compared with the same month last year, while the number of unemployed persons has fallen by 110,000 (5.4 percent) over this period. Japan's participation rate increased from 60.0 percent in November to 60.1 percent in December.
Japan's labour market remains solid, with positive jobs growth, low unemployment and strong labour force participation. This is providing a boost to consumer purchasing power, with other data published today showing household real incomes rose 2.3 percent year-on-year in December. Officials at the Bank of Japan cite the labour market 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.