Japan’s labor market remains tight, consumption picks up in June

Japanese companies continue to face severe labor shortages as job availability improved further in June to the best level in over four decades.

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Japanese companies continue to face severe labor shortages as job availability improved further in June to the best level in over four decades, while the unemployment rate declined, government data showed Friday.

Job availability improved to 1.51 from 1.49 in May, marking the highest level since February 1974, according to the Ministry of Health, Labor and Welfare. This means that 151 positions were available for every 100 job seekers.

In a fresh sign that labor is in short supply, the job-to-applicant ratio for regular workers stood at 1.01, rising above 1 for the first time since comparable data became available in 2004.

The jobless rate in June, meanwhile, fell to 2.8 percent in June from 3.1 percent the previous month, the Ministry of Internal Affairs and Communications said Friday.

Separate data also released Friday showed consumption is gradually picking up. Household spending marked the first year-on-year gain in 16 months after it rose 2.3 percent to 268,802 yen ($2,420) in June, the Ministry of Internal Affairs and Communications said.

These data provided fresh evidence that the Japanese economy remains on a moderate recovery path. But the country’s labor shortage is a potential bottleneck to growth as the aging of its population continues.

The unemployment rate for men fell 0.3 percent to 2.9 percent while that for women shrank 0.2 percent to 2.7 percent, the labor ministry said.

The number of unemployed people dropped a seasonally adjusted 7.8 percent from the previous month to 1.89 million, while Japan had 65.31 million workers in June, up 0.2 percent.

Source: Nikkei
Image: NHK
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