JP: Unemployment Rate

Mon Dec 25 17:30:00 CST 2017

Consensus Actual Previous
Level 2.8% 2.7% 2.8%

Japan's unemployment rate fell from 2.8 percent in October to 2.7 percent in November, just below the consensus forecast of 2.8 percent. This is the lowest official unemployment rate Japan has seen since the November 1993.

The number of employed persons increased by 750,000 (1.2 percent) on the year in November, while the number of unemployed persons fell by 190,000 (9.6 percent) over this period. Japan's participation rate was 60.6 percent in November, up from 60.0 twelve months earlier.

Today's data show strong employment growth and multi-decade lows in unemployment, consistent with the Bank of Japan's assessment that labour market conditions are tightening. Officials expect this will gradually translate into stronger wages growth and help push inflation towards its 2.0 percent target. Household spending data also released today showed real household income rose 1.8 percent on the year in November. CPI data released today also showed that the recent upward trend in core inflation remains intact.

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.