Japan's unemployment rate was steady at 2.8 percent in April, unchanged from the rate recorded in March and February, and in line with the consensus forecast. This is the lowest official unemployment rate Japan has seen since the mid-1990s.
The number of employed persons increased by 800,000 (1.1 percent) on the year in April, while the number of unemployed persons fell by 280,000 (12.4 percent) over this period. Japan's participation rate was 60.3 percent in April, up from 59.8 twelve months earlier.
Today's data shows that Japan's labour market is continuing to generate strong employment growth, broadly consistent with recent comments from the Bank of Japan noting that conditions in the labour market have tightened. So far, however, this increase in employment has yet to translate into significant wage growth, with other data released today showing that real household income fell 2.2 percent in the year to April.
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.