| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Rate | 2.5% | 2.4% to 2.6% | 2.5% | 2.5% |
Highlights
Key points:
--Japanese payrolls posted their 34th straight rise on year in May amid chronic shortages of doctors and nurses as well as construction workers, truck drivers and system engineers. The seasonally adjusted unemployment rate stood at 2.5% after being unchanged in April and edging up to 2.5% in March from 2.4% in February.
--In unadjusted data, employment surged 720,000 on the year to 68.38 million in May after rising 460,000 the previous month. The number of unemployed fell by 100,000 to 1.83 million after falling 50,000 the previous month. In December 2024, 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 a second straight jump in the medical and welfare industry as well as solid gains in other services and information technology, as largely seen in the prior month. On the downside, manufacturing jobs slumped for the second month in a row. Construction firms continued shedding payrolls as they have failed to recruit workers who are shying away from long work hours and other severe conditions but the transport industry saw a rebound after recent drops.
Takeaway: The government continues to describe employment conditions as"showing signs of improvement in its latest monthly economic report for June. Japanese firms are unlikely to lay off workers even in the face of the drag from high U.S. import duties. Wage hikes are spreading to smaller firms amid labor shortages but high costs of living are eroding consumer spending power.
--Japanese payrolls posted their 34th straight rise on year in May amid chronic shortages of doctors and nurses as well as construction workers, truck drivers and system engineers. The seasonally adjusted unemployment rate stood at 2.5% after being unchanged in April and edging up to 2.5% in March from 2.4% in February.
--In unadjusted data, employment surged 720,000 on the year to 68.38 million in May after rising 460,000 the previous month. The number of unemployed fell by 100,000 to 1.83 million after falling 50,000 the previous month. In December 2024, 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 a second straight jump in the medical and welfare industry as well as solid gains in other services and information technology, as largely seen in the prior month. On the downside, manufacturing jobs slumped for the second month in a row. Construction firms continued shedding payrolls as they have failed to recruit workers who are shying away from long work hours and other severe conditions but the transport industry saw a rebound after recent drops.
Takeaway: The government continues to describe employment conditions as"showing signs of improvement in its latest monthly economic report for June. Japanese firms are unlikely to lay off workers even in the face of the drag from high U.S. import duties. Wage hikes are spreading to smaller firms amid labor shortages but high costs of living are eroding consumer spending power.
Market Consensus Before Announcement
Key forecast: The seasonally adjusted unemployment rate in Japan 2.5% in May vs. 2.5% the previous two months, 2.4% in February. Payrolls seen up on year for the 34th straight month amid widespread labor shortages. Other data show real wages are down amid high costs of living.
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.
