JP: Unemployment Rate

Mon Aug 28 18:30:00 CDT 2017

Consensus Actual Previous
Level 2.8% 2.8% 2.8%

Japan's unemployment rate was steady at 2.8 percent in July, unchanged from June and in line with the consensus forecast. This matches the level recorded earlier in the year and is the lowest official unemployment rate Japan has seen since the mid-1990s.

The number of employed persons increased by 590,000 (0.9 percent) on the year in July, while the number of unemployed persons fell by 120,000 (5.9 percent) over this period. Japan's participation rate was 60.8 percent in May, up from 60.3 twelve months earlier.

Japan's economy is continuing to generate solid employment growth and multi-year lows in unemployment, broadly in line with recent comments from the Bank of Japan highlighting the strength of the labour market as a positive factor for the growth outlook. Although these gains in employment have yet to translate into a sustained and significant boost to wage growth, household spending data also released today showed real household income rose 3.5 percent on the year in July, accelerating from growth of just 0.1 percent in June and the strongest increase since July 2015.

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.