Global| Aug 27 2004Japanese Unemployment Rises in July, But So Does Employment; Signs of Recovery Ambiguous
Summary
Unemployment increased in Japan in July, according to data reported today by the Ministry of Public Management, Home Affairs, Posts and Telecommunications. The unemployment rate rose from 4.6% in June to 4.9%, the highest in five [...]
Unemployment increased in Japan in July, according to data reported today by the Ministry of Public Management, Home Affairs, Posts and Telecommunications. The unemployment rate rose from 4.6% in June to 4.9%, the highest in five months. Headline writers in the press declared that the economic recovery in Japan was faltering.
Indeed, the trajectory of labor market indicators is not unambiguously upward. Employment is down from an April peak and also lower than its year-ago amount. Even so, the number of people employed rose 90,000 in July and remains well above a recent trough in November. The Japanese "recovery" is proceeding in fits and starts, making any single month's performance hard to put into a trend or context.
At the same time, the rise in unemployment occurred because of an increase in the labor force. After falling sharply for two months, the total of those employed and unemployed in July regained about half its May-June loss. It is seen in the graph that the labor force has shrunk persistently since the middle of 1998. The July snapback reversed the previous month's 0.3% fall in labor force participation as a percent of the working-age population. Such developments, if sustained, can suggest improved expectations among potential workers who begin to hunt for new jobs they believe might now be available; this is a sign of recovery even as it keeps the unemployment rate from decreasing until actual hiring catches up.
| Seasonally Adjusted, Millions | July 2004 | June 2004 | May 2004 | July 2003 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|---|
| Employment | 63.24 | 63.15 | 63.53 | 63.33 | 63.17 | 63.30 | 64.10 |
| Unemployment | 3.27 | 3.05 | 3.05 | 3.52 | 3.50 | 3.59 | 3.40 |
| Labor Force* | 66.51 | 66.20 | 66.58 | 66.85 | 66.67 | 66.89 | 67.50 |
| Population, Age 15+ | 109.84 | 109.82 | 109.95 | 109.68 | 109.62 | 109.27 | 108.86 |
| Participation Rate* (%) | 60.6% | 60.3% | 60.6% | 61.0% | 60.8% | 61.2% | 62.0% |
| Unemployment Rate ** (%) | 4.9% | 4.6% | 4.6% | 5.3% | 5.3% | 5.4% | 5.0% |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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