Japanese payrolls posted their 31st straight rise on year in February amid lingering labor shortages. The seasonally adjusted unemployment rate eased slightly to 2.4%, as expected by some economists, after being unchanged at 2.5% for the third consecutive month and edging up from 2.4% in September, which was the lowest in more than four years (since 2.4% in February 2020).

The lower jobless rate was triggered by a sharp 6.2% drop on the month in the number of people who began looking for work and thus were counted as being jobless after surging 11.6% the previous month. This more than offset a 5.4% rise in job cuts/retirements. The number of those who quit for other positions was unchanged.

In unadjusted data, employment rose 400,000 on the year to 67.68 million in January after surging 650,000 in January. The number of unemployed fell 120,000 to 1.65 million after being unchanged the previous month. In December, it dipped 20,000 for the fifth straight year-on-year drop to a pre-pandemic level of 1.54 million, which was 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 continued strong gains in the medical and welfare industry, hotels/restaurants and"other services. Manufacturing, transport, and wholesale/retail showed sharp drops.

The government continues to describe employment conditions as"showing signs of improvement in its latest monthly economic report. Major firms have matched or exceeded union demands for base wage hikes for the fiscal year that starts on April 1 but elevated costs of living have pushed the real wage y/y change into a drop, squeezing many households.

Japanese payrolls are expected to post their 31st straight rise on year in February amid lingering labor shortages. The seasonally adjusted unemployment rate is forecast at 2.5% after being unchanged at 2.5% for the third consecutive month and edging up from 2.4% in September, which was the lowest in more than four years (since 2.4% in February 2020).

The government continues to describe employment conditions as"showing signs of improvement” in its latest monthly economic report. Major firms have matched or exceeded union demands for base wage hikes for the fiscal year that starts on April 1 but elevated costs of living have pushed the real wage y/y change into a drop, squeezing many households.

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.