Japan’s Unemployment Rate in Fiscal 2022 Improves to 2.6%

Japan’s seasonally adjusted unemployment rate in March was 2.8%, worsening for the second month, while the average unemployment rate in fiscal 2022 dropped 0.2% to 2.6, marking the second straight year of improvement amid a steady recovery from the COVID-19 pandemic.
Job availability in fiscal 2022 rose 0.15 points to 1.31, also marking a second straight year of improvement, but the figure was still low compared with 1.55 in fiscal 2019 before the economy was affected by the emergence of COVID-19.

Labour Force Survey Monthly Results¹

The employment situation is gradually picking up.

(1) Employment

The number of employed persons in March 2023 was 66.99 million, an increase of 150,000 over the same month the previous year. By gender, this included 30.38 million men, up 350,000, and 30.38 million women, up 350,000 over the previous year, respectively.

(2) Unemployment

The number of unemployed persons in March 2023 was 1.93 million, an increase of 130,000 from the same month in the previous year.
The seasonally adjusted unemployment rate in March was 2.8%, up 0.2 over the previous month, worsening for the second time in five months, as more people sought better working conditions amid an economic recovery from the COVID-19 pandemic. The unemployment rate for men was 3.0%, up 0.1, and 2.5% for women, up 0.2 over the previous month respectively.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in March stood at 1.32, down 0.02 from the previous month, worsening for the third straight month. This ratio means there were 132 job openings for every 100 job seekers. The ratio of regular employee job offers to applicants was 1.02, unchanged from the previous month.
The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.29, down 0.03 from the previous month. Among various industries, the lifestyle and entertainment sectors saw the sharpest rise at 8.3%, followed by accommodation and restaurant services at 5.9%. In contrast, employment offers in the manufacturing sector sank 8.0%, while those in the construction sector dropped 6.3%.

Industrial Production²

Japan’s industrial output in fiscal 2022 declined 0.2% from the previous year due to the slowing of the semiconductor market since the fall. A recovery in the automobile sector, however, was not enough to offset a slump in electronic parts and devices as well as decreased demand for inorganic and organic chemicals.
Industrial output in March rose 0.8% over the previous month for the second increase in two months after vehicle production increased on the back of easing semiconductor shortages. Industrial production showed signs of increase at a moderate pace. Production, shipments, inventories, and inventory ratio all increased.
The industries that mainly contributed to this increase were as follows: (1) motor vehicles; (2) production machinery; and (3) chemicals (excl. inorganic and organic chemicals and medicine), in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 4.1% in April and decrease 2.0% in May.

March 2022

 Family Income and Expenditure Survey³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in March was 312,758 yen, up 1.8% in nominal terms and down 1.9% in real terms from the previous year due to rising prices. By component in real terms, spending on culture & recreation rose 10.4% and fuel, light, and water utility charges rose 6.7%. Food expenditure fell 1.7%, affected by rising prices.
In fiscal 2022, which ended in March, household spending rose an inflation-adjusted 0.7% over the previous year to 293,671 yen for the second straight yearly increase.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 498,581 yen, down 0.9% in nominal terms and down 4.5% in real terms from the previous year. The average level of consumption expenditure was 340,016 yen per month, down 1.1% in nominal terms and down 4.7% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in March was 104.4 (2020 = 100), up 3.2% over the previous year and down 0.3% from the previous month. Core inflation (CPI less food and energy) was up 3.8% over the previous year, marking the twelfth straight month of increase. Energy prices dipped 3.8%, the second fall in nearly two years, as electricity bills fell 8.5% due to the government’s subsidization of utility bills for consumers. Food prices (excluding volatile fresh items) rose 8.2%, the fastest pace in nearly 47 years. Egg prices surged 29.4% amid bird flu-related supply concerns.

March 2022

1. Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)　　　(https://www.stat.go.jp/english/data/roudou/results/month/index.html)
2.  Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)　　　(https://www.meti.go.jp/english/statistics/tyo/iip/index.html)
3.  Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)　　　(https://www.stat.go.jp/english/data/kakei/156.html)
4.  Source: Consumer Price Index (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/cpi/1581-z.html)