Japan Unemployment Rate Falls to 5.1%

Japan's unemployment rate fell to a four-month low of 5.1% in August from 5.2% in July, as the number of unemployed showed the second straight monthly drop, data from the Ministry of Internal Affairs and Communications showed Friday.

A gradual improvement in the labor market was also confirmed in year-on-year changes but the number of employed people fell 180,000 from August last year, posting the first y/y drop in two months after marking the first y/y rise in 30 months in July (+10,000).

The seasonally adjusted unemployment rate for August matched analysts' median forecast as well as April's rate, drifting down from the recent high of 5.3% in June.

The August jobless rate was below the record high of 5.6% hit in July 2009, but still well above the 4.2% rate seen at the start of 2009.

In August, the number of unemployed fell by a seasonally adjusted 70,000 from the previous month, or 2.1%, to 3.34 million, compared with a drop of 60,000 in July. It was the second consecutive m/m drop.

The number of payroll jobs was little changed, down by a seasonally adjusted 10,000 month-on-month, or 0.0%, at 62.45 million, showing the first m/m drop in three months, after rising 210,000 m/m in July.

On an unadjusted basis, the number of employed people fell by 180,000 to 62.78 million in August, marking the first year-on-year drop in two months. Employment rose 10,000 in July, the first year-on-year gain in 30 months.

The unadjusted number of jobless workers was down by 240,000 in August from a year earlier at 3.37 million, marking the third consecutive year-on-year decline, after falling 280,000 in July.

Job losses remained largely in agriculture and forestry, construction, manufacturing, wholesale and retail trade as well as personal and amusement services.

Meanwhile, the medical, health care and welfare, education, learning support as well as hotels and restaurant sectors continued to create jobs.

The Japanese economy has moved out of the sharp contraction seen early last year, but the jobless rate is a lagging indicator that typically follows economic movements after a delay of several months.

The Bank of Japan has said that the employment and income situation remains severe but that the degree of severity has eased somewhat.

The BOJ's September Tankan survey showed that sentiment among Japan's major manufacturers improved for the sixth straight quarter but also indicated that business managers are turning more cautious in their outlook for the coming months due to the yen's rise and increased uncertainty over the global economy.

Japan Unemployment Rate Falls to 5.1%

TradingEconomics.com, MarketNews
10/2/2010 2:25:01 PM