| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Rate | 2.5% | 2.5% to 2.6% | 2.4% | 2.5% |
Highlights
Japanese payrolls posted their sixth straight year-over-year growth in January as the tourism industry continued hiring workers and construction firms tried to catch up, while the unemployment rate unexpectedly eased to a three-year low of 2.4 percent on stronger job creation, down from 2.5 percent in the previous two months and 2.6 percent in October, data released Friday by the Ministry of Internal Affairs and Communications showed.
Compared to the previous month, fewer people quit their jobs to look for other openings or began looking for work, which more than offset the impact of an increase in the number of people either lost their positions or retired at the start of the year.
The government has resumed its domestic travel discount program on a smaller scale after a brief suspension during the yearend and new year holidays. It lifted most of its Covid border restrictions in October to allow more visitors from overseas, which has been supporting hotels and retail stores.
There are expectations that economic activity will pick up further in months ahead as the recent spike in new Covid cases appears to have peaked.
The Econoday Consensus Divergence Index stood at plus 2, just above zero, which indicates the Japanese economy is performing slightly better than expected after underperforming recently. Excluding the impact of inflation, the index was at plus 10.
The seasonally adjusted average unemployment rate stood at 2.4 percent in January, lower than the median economist forecast of 2.5 percent (forecasts ranged from 2.5 percent to 2.6 percent). It is the lowest since 2.4 percent in February 2020. The jobless rate fell to 2.5 percent in November from 2.6 percent in October and September, when it rose from 2.5 percent in August. The current level is an improvement from 2.8 percent at the start of 2022. The monthly jobless rate moved in tight ranges of 2.7 percent to 3.0 percent in 2021 and 2.5 percent to 2.8 percent in 2022.
The latest figure is below the recent high of 3.1 percent hit in October 2020 but still above 2.2 percent recorded in December 2019, just before the pandemic triggered a global slump.
In its monthly economic report released last week, the government maintained its assessment that employment conditions as"picking up."
The number of employed stood at a seasonally adjusted 67.44 million in January, up 180,000 (0.3 percent) on the month after rising 90,000 in December and falling 140,000 in November. The number of unemployed fell 40,000 (2.3 percent) in January to an adjusted 1.67 million after falling 20,000 the previous month.
The number of people who left, looking for other openings fell 20,000 (2.9 percent) in January after dipping 10,000 in December while the number of those who lost their jobs or retired increased 30,000 (7.7 percent) after falling 30,000 the previous month. The number of people who began looking for work fell 20,000 (4.3 percent) after rising 30,000 previously.
Compared to a year earlier, the number of employed jumped 430,000, to an unadjusted 66.89 million in January for the sixth straight increase after rising 100,000 in December and posting sharp gains of 280,000 in November, 500,000 in October and 400,000 in September.
The number of unemployed fell 210,000 on the year to an unadjusted 1.64 million in January, marking the 19th straight month of year-over-year decline after falling 150,000 the previous month. It has drifted down from a pandemic peak of 2.17 million in October 2020 and is just above 1.60 million at the beginning of 2020.
As seen in recent months, the overall employment increase in January from a year earlier was led by hotels, restaurants and bars, a category which posted the seventh straight year-over-year gain, with the pace of increase picking up after slowing the previous month.
Employment also increased among information and telecommunications service providers as well as in the medical and welfare category after falling on the year in December.
Jobs in the wholesale and retail industry dropped on the year for the second straight month after being flat in November and posting months of decline earlier. Employment at construction firms posted the fourth straight month of increase in December. Manufacturing jobs dipped for the second month in a row after recent improvement.
Compared to the previous month, fewer people quit their jobs to look for other openings or began looking for work, which more than offset the impact of an increase in the number of people either lost their positions or retired at the start of the year.
The government has resumed its domestic travel discount program on a smaller scale after a brief suspension during the yearend and new year holidays. It lifted most of its Covid border restrictions in October to allow more visitors from overseas, which has been supporting hotels and retail stores.
There are expectations that economic activity will pick up further in months ahead as the recent spike in new Covid cases appears to have peaked.
The Econoday Consensus Divergence Index stood at plus 2, just above zero, which indicates the Japanese economy is performing slightly better than expected after underperforming recently. Excluding the impact of inflation, the index was at plus 10.
The seasonally adjusted average unemployment rate stood at 2.4 percent in January, lower than the median economist forecast of 2.5 percent (forecasts ranged from 2.5 percent to 2.6 percent). It is the lowest since 2.4 percent in February 2020. The jobless rate fell to 2.5 percent in November from 2.6 percent in October and September, when it rose from 2.5 percent in August. The current level is an improvement from 2.8 percent at the start of 2022. The monthly jobless rate moved in tight ranges of 2.7 percent to 3.0 percent in 2021 and 2.5 percent to 2.8 percent in 2022.
The latest figure is below the recent high of 3.1 percent hit in October 2020 but still above 2.2 percent recorded in December 2019, just before the pandemic triggered a global slump.
In its monthly economic report released last week, the government maintained its assessment that employment conditions as"picking up."
The number of employed stood at a seasonally adjusted 67.44 million in January, up 180,000 (0.3 percent) on the month after rising 90,000 in December and falling 140,000 in November. The number of unemployed fell 40,000 (2.3 percent) in January to an adjusted 1.67 million after falling 20,000 the previous month.
The number of people who left, looking for other openings fell 20,000 (2.9 percent) in January after dipping 10,000 in December while the number of those who lost their jobs or retired increased 30,000 (7.7 percent) after falling 30,000 the previous month. The number of people who began looking for work fell 20,000 (4.3 percent) after rising 30,000 previously.
Compared to a year earlier, the number of employed jumped 430,000, to an unadjusted 66.89 million in January for the sixth straight increase after rising 100,000 in December and posting sharp gains of 280,000 in November, 500,000 in October and 400,000 in September.
The number of unemployed fell 210,000 on the year to an unadjusted 1.64 million in January, marking the 19th straight month of year-over-year decline after falling 150,000 the previous month. It has drifted down from a pandemic peak of 2.17 million in October 2020 and is just above 1.60 million at the beginning of 2020.
As seen in recent months, the overall employment increase in January from a year earlier was led by hotels, restaurants and bars, a category which posted the seventh straight year-over-year gain, with the pace of increase picking up after slowing the previous month.
Employment also increased among information and telecommunications service providers as well as in the medical and welfare category after falling on the year in December.
Jobs in the wholesale and retail industry dropped on the year for the second straight month after being flat in November and posting months of decline earlier. Employment at construction firms posted the fourth straight month of increase in December. Manufacturing jobs dipped for the second month in a row after recent improvement.
Market Consensus Before Announcement
Japanese payrolls likely marked their sixth straight year-over-year growth in January as the tourism industry continued hiring workers, while the unemployment rate is seen staying low at 2.5 percent after edging down to the current level in November from 2.6 percent.
Definition
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.
Description
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.
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.
