| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Rate | 2.5% | 2.4% to 2.6% | 2.4% | 2.5% |
Highlights
Japanese payrolls posted a 17th straight rise on year amid widespread labor shortages at factories, hotels, restaurants and communications firms, while the unemployment rate edged down to an 11-month low of 2.4 percent from 2.5 percent in November, coming in slightly better than the consensus forecast of 2.5 percent.
Compared to the previous month, the number of people who lost their jobs or retired dropped sharply after surging in the previous month. The number of those who quit to look for other openings fell for the second straight month and there were fewer new job seekers. The number of employed men slumped while that of women rose slightly after surging in November.
Econoday's Relative Performance Index stood at zero, which indicates the Japanese economy is performing as expected. Excluding the impact of inflation, the RPI was at plus 17.
In its monthly economic report for January released last week, the government maintained its overall assessment for the second month in a row, saying the economy is recovering moderately with some soft spots, but warned that the powerful New Year's Day earthquake in the northwestern region of Hokuriku has reduced electronic parts supply and battered tourism. It kept its view on employment conditions that they are"showing signs of improvement."
December's unemployment rate is the lowest since 2.4 percent seen in January 2023, which was a three-year low. The jobless rate moved in a relatively tight range of 2.4 percent to 2.8 percent in 2023. The average rate for the year was 2.6 percent, unchanged from 2022, when it improved from 2.8 percent recorded in 2021 and 2020 but still above 2.4 percent in the pre-pandemic year of 2019.
Compared to a year earlier, the number of employed rose 380,000 to an unadjusted 67.54 million in December for the 17th straight increase, led by women and both regular and non-regular jobs, as seen in recent months. It followed increases of 560,000 in November, 160,000 in October and 210,000 in September.
The number of unemployed fell 20,000 on the year to an unadjusted 1.56 million in December, after rising 40,000 in November for the first rise in three months. It has drifted down from a pandemic peak of 2.17 million in October 2020 to below 1.60 seen at the start of 2020. It is now the lowest since 1.46 million in December 2019.
In the whole of 2023, the number of employed rose for the third straight year and the number of unemployed declined for the second year in a row.
Overall employment in December was led by the manufacturing industry and information communications firms including news media, mobile phone carriers and software developers.
The hotels, restaurants and bars category continued to raise payrolls as people have been traveling and eating out more freely without causing a spike in Covid infections. The construction industry increased hiring on the year after shedding previously. Employment in the real-estate and goods leasing category jumped after posting modest gains in the previous two months.
On the downside, financial firms cut payrolls from year-earlier levels for the seventh consecutive month. Employment in the wholesale and retail industry also fell after marking the first year-over-year decline in seven months in November.
Compared to the previous month, the number of people who lost their jobs or retired dropped sharply after surging in the previous month. The number of those who quit to look for other openings fell for the second straight month and there were fewer new job seekers. The number of employed men slumped while that of women rose slightly after surging in November.
Econoday's Relative Performance Index stood at zero, which indicates the Japanese economy is performing as expected. Excluding the impact of inflation, the RPI was at plus 17.
In its monthly economic report for January released last week, the government maintained its overall assessment for the second month in a row, saying the economy is recovering moderately with some soft spots, but warned that the powerful New Year's Day earthquake in the northwestern region of Hokuriku has reduced electronic parts supply and battered tourism. It kept its view on employment conditions that they are"showing signs of improvement."
December's unemployment rate is the lowest since 2.4 percent seen in January 2023, which was a three-year low. The jobless rate moved in a relatively tight range of 2.4 percent to 2.8 percent in 2023. The average rate for the year was 2.6 percent, unchanged from 2022, when it improved from 2.8 percent recorded in 2021 and 2020 but still above 2.4 percent in the pre-pandemic year of 2019.
Compared to a year earlier, the number of employed rose 380,000 to an unadjusted 67.54 million in December for the 17th straight increase, led by women and both regular and non-regular jobs, as seen in recent months. It followed increases of 560,000 in November, 160,000 in October and 210,000 in September.
The number of unemployed fell 20,000 on the year to an unadjusted 1.56 million in December, after rising 40,000 in November for the first rise in three months. It has drifted down from a pandemic peak of 2.17 million in October 2020 to below 1.60 seen at the start of 2020. It is now the lowest since 1.46 million in December 2019.
In the whole of 2023, the number of employed rose for the third straight year and the number of unemployed declined for the second year in a row.
Overall employment in December was led by the manufacturing industry and information communications firms including news media, mobile phone carriers and software developers.
The hotels, restaurants and bars category continued to raise payrolls as people have been traveling and eating out more freely without causing a spike in Covid infections. The construction industry increased hiring on the year after shedding previously. Employment in the real-estate and goods leasing category jumped after posting modest gains in the previous two months.
On the downside, financial firms cut payrolls from year-earlier levels for the seventh consecutive month. Employment in the wholesale and retail industry also fell after marking the first year-over-year decline in seven months in November.
Market Consensus Before Announcement
Japanese payrolls are expected to post their 17th straight rise on year in December, reflecting widespread labor shortages at manufacturers, medical services, hotels and restaurants among others. The unemployment rate is forecast at 2.5 percent, unchanged from the previous two months and staying just above the three-year low of 2.4 percent hit in January 2023. More people are quitting to look for better openings and those who join the labor market, unemployed, tend to find work soon, keeping the jobless rate steady.
In its monthly economic report for January, the government maintained its overall assessment for the second month in a row, saying the economy is recovering moderately with some soft spots, but warned that the powerful New Year's Day earthquake in the northwestern region of Hokuriku has reduced electronic parts supply and battered tourism. It kept its view on employment conditions that they are"showing signs of improvement."
In its monthly economic report for January, the government maintained its overall assessment for the second month in a row, saying the economy is recovering moderately with some soft spots, but warned that the powerful New Year's Day earthquake in the northwestern region of Hokuriku has reduced electronic parts supply and battered tourism. It kept its view on employment conditions that 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.
