With a slight improvement in the jobless rate in Japan, it remains to be the lowest since July 2007 before the collapse of Lehman Brothers Holdings Inc. that sparked a global financial crisis. Japan’s unemployment rate improved by 0.10 percent in February to 3.6 percent from the previous month’s 3.7 rate, showing that many companies have gone on rehiring employees with the economy recovering.
According to the Internal Affairs and Communications Ministry, the number of unemployed people fell to a seasonal 3.7 percent in January with 2.33 million. Out of this number, 760,000, or 5 percent, left their jobs involuntarily. On the other hand, employed people rose by 0.2 percent to 63.32 million. An official from the ministry attributed the increase to the economic recovery. “As the economy is in good shape, the number of employees has been steadily increasing,” he said.
Other data reported improvement in job availability for the 15th straight month, as employment offers to seekers rose to a 1.05 ratio in February from the 1.04 in the previous month, showing that 105 job opportunities are available to every 100 job seekers. The medical and welfare field registered the highest number of job requirements with 230,000, while the information and communication sector added 190,000 jobs last year compared to 2012. On the other hand, transport and postal services slashed 140,000 jobs in the same year. If the scheduled sales tax hike to 8 percent proves to be disadvantageous to the economy and corporate performance, it could worsen the unemployment rate, said Norinchukin Research Institute chief economist Takeshi Minami.
Minami believes, “Many companies are likely to take a wait-and-see attitude for about six months, but if the economy slows at a faster pace than they expect, they may start to decrease the number of their workers.” Monetary easing and fiscal spending has helped the economy grow for the fifth consecutive quarter through October – December. However, many analysts forecast that the sales tax hike will suppress investment and consumption. Japan Center for Economic Research estimates that gross domestic product will plunge to 4.1 percent in the next quarter, as projected by 41 private-sector economists.
[via Kyodo News]