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No.166(2014/8/22)
Economic and Labour Situation in Japan (August 2014)

Japan's real gross domestic product shrank at an annualized rate of 7.1% in the second quarter, according to the average estimate of 10 nongovernmental economists surveyed by the Nihon Keizai Shimbun newspaper. The economists checked their figures in light of last month's slump in factory output. Industrial production in June dropped 3.3% from the previous month. Many economists were surprised by how sharply consumers cut back on spending after the tax hike. They calculated that on average consumer spending sank by 4.1% in the April-June quarter.

Industrial Production
Industrial production in June decreased by 3.3% from the previous month for the first decrease in two months; it was down 3.2% year-on-year. The index in June was 96.7 (seasonally adjusted).
Industries that mainly contributed to the decrease were as follows: (1) transport equipment, (2) general-purpose, production, and business-oriented machinery, and (3) information and communication electronics equipment, in that order.
Commodities that mainly contributed to the decrease were as follows: (1) large passenger cars, (2) reaction vessels, and (3) plastic products for machine tools and parts, in that order.
According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 2.5% in July and by 1.1% in August.

Family Income and Expenditure Survey in June
The three-point consumption tax increase in April has continued to put a drag on household spending.
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in June was 272,791 yen, up 1.3% in nominal terms but down 3.0% in real terms year-on-year following a substantial 8.0% drop in May.
(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 710,375 yen, down 2.5% in nominal terms and down 6.6% in real terms year-on-year.
The average consumption expenditure was 295,738 yen, down 0.3% in nominal terms and down 4.5% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in June was 63.89 million, an increase of 560,000, or 0.9%, over the same month in the previous year.
(2) Unemployment
The number of unemployed persons in June was 2.45 million, a decrease of 150,000, or 5.8%, from the same month in the previous year.
The seasonally adjusted unemployment rate was 3.7%, up 0.2 point over the previous month.

(10,000 persons)
  June figures Change from previous year
      (%)
Population aged 15 years or over 11,081 –9 –0.1
Labour force 6,634 41 0.6
Employed persons 6,389 56 0.9
Employees 5,617 46 0.8
Unemployed persons 245 –15 –5.8
Not in labour force 4,441 –47 –1.0
Labour force participation rate (%) 59.9 0.5
Employment rate (%) 57.7 0.6
Unemployment rate, original series (%) 3.7 –0.2
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.7 0.2

Japan's job availability continued to improve in June, reaching its best level in over 22 years, which suggests that companies are keen to hire more workers amid the economic recovery. Job availability in June improved 0.01 point over the previous month, with the ratio of job offers to jobseekers standing at 1.10. This figure means that there were 110 jobs available for every 100 jobseekers.

Consumer Prices
The consumer price index in June was 103.4 (2010 = 100), down 0.1% from the previous month but up 3.6% over the same month of the previous year.

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