Japanese payrolls posted their 29th straight rise on year in December amid widespread labor shortages. As expected, the seasonally adjusted unemployment rate improved slightly to 2.4% from 2.5% in November after ticking up to 2.5% in October from 2.4% in September.

The dip in the jobless rate was due to a 5.0% drop in job losses and retirements as well as a 6.8% slump in the number of those who began looking for work and thus were counted as being unemployed. Those two factors offset the effects of a 5.4% rise in the number of people who quit for other positions.

In unadjusted data, employment surged 570,000 on the year to 68.11 million in December after rising 340,000 in November. The number of unemployed fell 20,000 to a pre-pandemic level of 1.54 million, marking the fifth straight year-on-year drop after falling 50,000 the previous month. It is now the lowest since 1.46 million in December 2019 (it was 1.60 million in January 2020).

The year-on-year job creation was led by the medical and welfare industry,"other services" and education/learning support service provides. Payrolls at hotels and restaurants rebounded after a rare drop the previous month. Manufacturing and construction continued to show declines.

Japanese payrolls are expected to post their 29th straight rise on year in December amid widespread labor shortages. The unemployment rate is forecast at 2.4%, down slightly from 2.5% in November after ticking up to 2.5% in October from an eight-month low of 2.4% in September. Some economists expect no change.

The government continues to describe employment conditions as"showing signs of improvement" in its latest monthly economic report.

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.