| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Rate | 2.5% | 2.5% to 2.7% | 2.5% | 2.6% |
Highlights
Japanese payrolls posted their 11th straight year-over-year growth in June as hotels, restaurants, factories and construction firms continued to fill job vacancies amid resilient consumer spending while the unemployment rate improved slightly to 2.5 percent from 2.6 percent in May as fewer people began looking work for the second straight month and job cuts had steadied, data released Tuesday by the Ministry of Internal Affairs and Communications showed.
Compared to the previous month, the number of people who lost their jobs or retired was unchanged for the second straight month while the number of those who quit to look for other openings was also flat after two months of decline.
The unexpected uptick in the March jobless rate to 2.8 percent from February's 2.6 percent was caused mainly by an increase in the number of people leaving to look for better jobs. Some of those people found work in April, when the rate slipped back to 2.6 percent.
The government's domestic travel discount program for residents and widely eased public health rules have been supporting the tourism industry.
The Econoday Consensus Divergence Index stood at minus 4, just below zero, which indicates the Japanese economy is performing only slightly worse than expected after underperforming with a wider margin earlier. Excluding the impact of inflation, the index was at plus 6.
The seasonally adjusted average unemployment rate stood at 2.5 percent in June, down slightly from 2.6 percent seen in May and April. It was in line with the median economist forecast of 2.5 percent. It is lower than 2.8 percent in March but is still slightly above a three-year low of 2.4 percent hit in January. The 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 reached in October 2020 but is above 2.2 percent recorded in December 2019, just before the pandemic triggered a global economic slump.
In its monthly economic report for July released last week, the government maintained its overall assessment, saying the economy is recovering moderately as substantial wage hikes and Covid-era excess savings are supporting consumer spending while improving supply chains are shoring up business confidence and investment. It also maintained its view on employment conditions after upgrading it for the first time in 11 months in June, saying they are"showing signs of improvement."
Regular wages among full-time workers have been rising steadily in the current fiscal year that began in April and are expected to rise further as more firms will reflect the results of spring labor-management negotiations. Summer bonuses are up further after a sharp gain last year and firms are raising hourly wages to secure workers.
Japanese workers at large firms are receiving an average 3.80 percent increase in total wages, a 30-year high, in fiscal 2023, up from 2.14 percent in the initial estimate for fiscal 2022. Excluding seniority-based rises that are already in contracts, the average base wage hike is lower at 2.33 percent, which is still up from 0.50 percent for the previous year.
Compared to a year earlier, the number of employed rose 260,000 to an unadjusted 67.85 million in June for the 11th straight increase after rising 150,000 in May, 140,000 in April, 150,000 in March and 90,000 in February and surging 430,000 in January.
The number of unemployed fell 70,000 on the year to an unadjusted 1.79 million in June for the second straight drop after falling 30,000 in May, rising 20,000 in April, and marking its first year-over-year rise in 21 months in March with a 130,000 jump and falling 60,000 in February. It has drifted down from a pandemic peak of 2.17 million in October 2020 but is still above 1.60 million at the beginning of 2020.
The overall employment increase in June from a year earlier was led by solid gains in the manufacturing sector and the construction industry as well as the hotels, restaurants and bars category, which has been benefiting from government subsidies for domestic traveling, pent-up domestic demand and a recovering inflow of foreign visitors.
The overall increase was also due to a sharp rebound in the medical and welfare category, which had declined in the previous four months as new Covid cases had decreased. Employment in education support also showed a modest increase after falling sharply for two months. Jobs in the wholesale and retail industry were up slightly after marking its first rise in sixth months in May.
Compared to the previous month, the number of people who lost their jobs or retired was unchanged for the second straight month while the number of those who quit to look for other openings was also flat after two months of decline.
The unexpected uptick in the March jobless rate to 2.8 percent from February's 2.6 percent was caused mainly by an increase in the number of people leaving to look for better jobs. Some of those people found work in April, when the rate slipped back to 2.6 percent.
The government's domestic travel discount program for residents and widely eased public health rules have been supporting the tourism industry.
The Econoday Consensus Divergence Index stood at minus 4, just below zero, which indicates the Japanese economy is performing only slightly worse than expected after underperforming with a wider margin earlier. Excluding the impact of inflation, the index was at plus 6.
The seasonally adjusted average unemployment rate stood at 2.5 percent in June, down slightly from 2.6 percent seen in May and April. It was in line with the median economist forecast of 2.5 percent. It is lower than 2.8 percent in March but is still slightly above a three-year low of 2.4 percent hit in January. The 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 reached in October 2020 but is above 2.2 percent recorded in December 2019, just before the pandemic triggered a global economic slump.
In its monthly economic report for July released last week, the government maintained its overall assessment, saying the economy is recovering moderately as substantial wage hikes and Covid-era excess savings are supporting consumer spending while improving supply chains are shoring up business confidence and investment. It also maintained its view on employment conditions after upgrading it for the first time in 11 months in June, saying they are"showing signs of improvement."
Regular wages among full-time workers have been rising steadily in the current fiscal year that began in April and are expected to rise further as more firms will reflect the results of spring labor-management negotiations. Summer bonuses are up further after a sharp gain last year and firms are raising hourly wages to secure workers.
Japanese workers at large firms are receiving an average 3.80 percent increase in total wages, a 30-year high, in fiscal 2023, up from 2.14 percent in the initial estimate for fiscal 2022. Excluding seniority-based rises that are already in contracts, the average base wage hike is lower at 2.33 percent, which is still up from 0.50 percent for the previous year.
Compared to a year earlier, the number of employed rose 260,000 to an unadjusted 67.85 million in June for the 11th straight increase after rising 150,000 in May, 140,000 in April, 150,000 in March and 90,000 in February and surging 430,000 in January.
The number of unemployed fell 70,000 on the year to an unadjusted 1.79 million in June for the second straight drop after falling 30,000 in May, rising 20,000 in April, and marking its first year-over-year rise in 21 months in March with a 130,000 jump and falling 60,000 in February. It has drifted down from a pandemic peak of 2.17 million in October 2020 but is still above 1.60 million at the beginning of 2020.
The overall employment increase in June from a year earlier was led by solid gains in the manufacturing sector and the construction industry as well as the hotels, restaurants and bars category, which has been benefiting from government subsidies for domestic traveling, pent-up domestic demand and a recovering inflow of foreign visitors.
The overall increase was also due to a sharp rebound in the medical and welfare category, which had declined in the previous four months as new Covid cases had decreased. Employment in education support also showed a modest increase after falling sharply for two months. Jobs in the wholesale and retail industry were up slightly after marking its first rise in sixth months in May.
Market Consensus Before Announcement
Japanese payrolls are expected to post their 11th straight year-over-year growth in June as hotels, restaurants, factories and construction firms continued to fill job vacancies amid resilient consumer spending while the unemployment rate is forecast to have improved slightly to 2.5 percent from 2.6 percent in May, which would be just above a three-year low of 2.4% hit in January.
In its monthly economic report for July released last week, the government maintained its overall assessment, saying the economy is recovering moderately as substantial wage hikes and Covid-era excess savings are supporting consumer spending while improving supply chains are shoring up business confidence and investment. It also maintained its view on employment conditions after upgrading it for the first time in 11 months in June, saying they are"showing signs of improvement."
In its monthly economic report for July released last week, the government maintained its overall assessment, saying the economy is recovering moderately as substantial wage hikes and Covid-era excess savings are supporting consumer spending while improving supply chains are shoring up business confidence and investment. It also maintained its view on employment conditions after upgrading it for the first time in 11 months in June, saying they are"showing signs of improvement."
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.
