Japanese payrolls posted their 32nd straight rise on year in March amid lingering labor shortages and despite growing uncertainty over a global trade war launched by President Trump. The seasonally adjusted unemployment rate ticked up to 2.5% after easing slightly to 2.4% in February and being at 2.5% in the previous four months. It stood at 2.4% in September 2024, which was the lowest in more than four years (since 2.4% in February 2020).

In fiscal 2024 that ended in March, the jobless rate stood at 2.5%, hitting the lowest since 2.3% in fiscal 2019 and improving from 2.6% in the previous two years, 2.8% in fiscal 2021, 2.9% in fiscal 2020.

the slight rise in the unemployment in March was led by a 5.1% increase on the month in job cuts/retirements and a 1.3% gain in those who quit for other openings. The number of people who began looking for work and thus were counted as being jobless was unchanged.

In unadjusted data, employment rose 440,000 on the year to 67.70 million in March after rising 400,000 the previous month. The number of unemployed fell by 50,000 to 1.80 million after falling by a sharp 120,000 in February and being flat in January. 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 a jump in education and learning support as well as a steady gain in real estate and leasing. The medical and welfare industry showed a slower increase after having posted sharp gains. Manufacturing rebounded slightly following months of decline while transport and postal services recorded a sharp drop. Construction continued to show a fall in payrolls as the industry has failed to attract workers.

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 32nd straight rise on year in March amid lingering labor shortages and despite growing uncertainty over a global trade war launched by President Trump. The seasonally adjusted unemployment rate is forecast to be unchanged at 2.4% after easing slightly to the level in February and having been stable at 2.5% in the previous four months. It stood at 2.4% in September 2024, 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.