| Consensus | Consensus Range | Actual | Previous | |
| Rate | 2.7% | 2.6% to 2.7% | 2.5% | 2.7% |
Highlights
The seasonally adjusted unemployment rate in Japan remained low and stable, falling to 2.5% in April amid lingering labor shortages after ticking up to 2.7% in March and slipping to 2.6% in February from 2.7% in January. Job cuts and retirements were unchanged from the previous month for the second time in a row while the number of people who quit for other openings was also flat. There was a sharp 10.9% drop in the number of those who began job hunting, which means fewer people were counted as being unemployed.
Japan's national average unemployment remains well below the rates in other major economies as labor shortages continue in the sectors with long work hours and lower pay, notably daycare, medical, transport and construction. Last year, unemployment was stuck at 2.6% from September to December after rising to the level in August from a five-month low of 2.4% in July.
Payrolls posted the third straight rise after marking a rare year-on-year drop in January, led by hotels, restaurants, entertainment service providers and construction firms. The increase has been led by gains in both regular and non-regular positions (there were sharp gains in women and non-regular jobs in April), after the total number of employed unexpectedly posted its first year-on-year drop in 42 months in January for one-off factors.
The government continues to describe employment conditions as"showing signs of improvement in its latest monthly economic report for May, unchanged since the last upgrade for the category in June 2023.
Details:
Japan Apr s/a unemployment rate 2.7% (Mar 2.7%); median forecast 2.7%
Japan Apr employment up 50,000 y/y at 67.78 million for 3rd straight y/y rise (Mar +30,000)
Japan Apr unemployed up 180,000 y/y at 2.12 mln (+140,000 in Mar at 1.94 mln); 9th straight rise
Market Consensus Before Announcement
Japan’s seasonally adjusted unemployment rate is expected to be little changed in April from the previous month as underlying labor market conditions remain firm amid persistent worker shortages, particularly in the hotel and food services sectors, supporting employment in recent months.
The April unemployment rate is seen unchanged at 2.7 percent from March. The number of employed persons in March rose for a second straight month, gaining 30,000 from a year earlier to 67.73 million. The number of unemployed persons stood at 1.94 million, up 140,000 from a year earlier and marking an eighth consecutive monthly increase.
By reason for seeking work, compared with a year earlier, the number of people leaving jobs due to employer or business circumstances increased by 30,000, while voluntary resignations rose by 50,000 and the number of people newly seeking jobs increased by 110,000. The strength of the labor market may be contributing to increases in voluntary job changes and new job seekers, suggesting the details were not entirely negative.
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.