Employment in Japan in February showed further signs of recovery, as a jobs index released today by the Ministry of Health, Labor and Welfare ticked up to 98.6 (seasonally adjusted, 2000=100), its highest level since March of last year. Further, it is only 0.1 point below its year-ago value, the best (or least bad) performance since August 1998. Japan has indeed endured more than 5-1/2 years of job shrinkage. And 1997 was the last full calendar year that saw a rise.

Employment patterns remain inconsistent, however. Only the service sector is showing outright increases in employment, while finance and construction are still declining markedly. Manufacturing jobs are still decreasing, too, but at a much slower pace than anytime since early 1998. The year-on-year reduction in February of just 1.4% extends a progressive improvement from a 5.1% plunge in May 2002.

Thus, Japan's job market continues to struggle, but appears to be working its way back toward growth. Similarly, wage rates are also approaching stability, but they too are uneven from month to month and recently have been particularly erratic.