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No.214(2016/6/10)
Economic and Labour Situation in Japan (June 2016)

Japan's Economy Growing Weakly
According to a preliminary report issued by the government, Japan's gross domestic product in the January-April period expanded by 0.4% over the previous quarter (an annualized rate of 1.7%). Consumer spending, which accounts for about 61% of Japan's economic output, rose by 0.5% following a 0.8% shrinkage in the previous quarter. Capital expenditure and housing investment both shrunk by 1.4% and 0.8%, respectively. Exports grew by only 0.6%.
In view of the weak GDP growth, Prime Minister Shinzo Abe announced the postponement of a consumption tax rate hike that had been scheduled for April next year.

Industrial Production
Industrial production in April increased by 0.3% over the previous month, registering an increase for the second consecutive month but down 3.5% year-on-year. The index in April was 97.0 (seasonally adjusted).
Industries that mainly contributed to the increase were as follows: (1) chemicals (excl. drugs), (2) electrical machinery, and (3) general-purpose, production, and business-oriented machinery, in that order.
According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 2.2% in May and 0.3% in June and to expand by 2.5% in the April-June quarter.

Family Income and Expenditure Survey in April
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in April was 298,520 yen, down 0.7% in nominal terms and 0.4% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 480,098 yen, up 0.7% in nominal terms and 1.0% in real terms year-on-year. The average consumption expenditure was 338,001 yen, up 1.1% in nominal terms and 1.4% in real terms year-on-year.

Labour Force Survey Monthly Results
The unemployment rate has been hovering in the 3.2%-3.4% range since April 2015, the lowest level in the last 19 years. Japan has likely achieved full employment and faces a severe shortage of labour, which is an obstacle for the world's third-largest economy as it struggles to break away from deflation.
(1) Employment
The number of employed persons in April was 63.96 million, an increase of 540,000, or 0.9%, over the previous year.

(2) Unemployment
The number of unemployed persons in April was 2.24 million, a decrease of 100,000, or 4.3%, from the same month in the previous year. The seasonally adjusted unemployment rate in April was 3.2%, the same as in the previous month. The unemployment rates for men and women were 3.6% and 2.8%, respectively.

(3) Job availability
Japan's job availability in April registered the best level in 24 years, with the ratio of job offers to jobseekers standing at 1.34, up 0.04 point over the previous month. This figure means that there were 134 jobs available for every 100 jobseekers.

Summary of Annual Report on the Labour Force Survey 2015

1. Population by labour force status

(1) Labour force
The labour force based on the yearly average for 2015 was 65.98 million, an increase of 110,000 over the previous year. The male labour force was 37.56 million, a decrease of 70,000, and the female labour force was 28.42 million, an increase of 180,000. The labour force aged 15-64 years (productive age) was 58.53 million, a decrease of 380,000. By gender, there were 33.03 million men, a decrease of 340,000, and 25.50 million women, a decrease of 30,000.

(2) Labour force participation rate
The labour force participation rate was 59.6%, a 0.2 point increase over the previous year. By gender, the rate was 70.3% for men, a 0.1 point decrease, and 49.6% for women, a 0.4 point increase. The labour force participation rate for people aged 15-64 years was 75.9%, a 0.4 point increase. By gender, the rate in this age group was 85.0% for men, a 0.2 point increase, and 66.8% for women, a 0.8 point increase. Among people aged 55-64 years, the labour force participation rate was 85.6% for men, a 0.9 point increase, and 59.2% for women, a 1.8 point increase.

(3) Not in labour force
The number of people not in the labour force was 44.73 million, a decrease of 160,000 from the previous year. The number of those not in the labour force aged 65 years or over was 26.25 million, an increase of 440,000.

2. Employed persons

(1) Employed persons
The number of employed persons was 63.76 million, an increase of 250,000 over the previous year. By gender, there were 36.22 million men, an increase of 10,000, and 27.54 million women, an increase of 250,000. The number of employed persons aged 15-64 years was 56.46 million, a decrease of 240,000. By gender, there were 31.81 million men, a decrease of 260,000, and 24.66 million women, an increase of 40,000.

(2) Employment rate
The employment rate was 57.6%, a 0.3 point increase over the previous year. By gender, the employment rate was 67.8% for men, a 0.1 point increase, and 48.0% for women, a 0.4 point increase. The employment rate for people aged 15-64 years was 73.3%, a 0.6 point increase. By gender, the rate for this age group was 81.8% for men, a 0.3 point increase, and 64.6% for women, a 1.0 point increase. Among people aged 55-64 years, the employment rate was 82.4% for men, a 0.9 point increase, and 57.9% for women, a 1.9 point increase.

(3) Employees/self-employed and family workers
The number of employees was 56.40 million, an increase of 450,000 over the previous year. By gender, there were 31.66 million men, an increase of 70,000, and24.74 million women, an increase of 380,000. The proportion of employees to employed persons was 88.5%, a 0.4 point increase. The number of self-employed and family workers was 7.05 million, a decrease of 200,000.

(4) Regular/nonregular employees
The number of regular employees was 33.13 million, an increase of 260,000, and the number of nonregular employees was 19.80 million, an increase of 180,000. By gender, there were 22.70 million male regular employees, an increase of 30,000; 6.34 million male nonregular employees, an increase of 40,000; 10.43 million female regular employees, an increase of 230,000; and 13.45 million female nonregular employees, an increase of 130,000.
Among people aged 15-64 years, there were 32.20 million regular employees, an increase of 200,000, and 17.13 million nonregular employees, a decrease of 150,000. Among people aged 65 years or over, there were 930,000 regular employees, an increase of 70,000, and 2.67 million nonregular employees, an increase of 330,000.
The number of female nonregular employees aged 45-54 years was 3.30 million, an increase of 120,000, and the number aged 25-34 years was 1.92 million, a decrease of 90,000. The proportion of nonregular employees to all employees, excluding executives, was 37.4%.

3. Unemployed persons

(1) Unemployed persons
The number of unemployed persons was 2.22 million, a decrease of 140,000 from the previous year. By gender, there were 1.34 million unemployed men, down 70,000, and 880,000 unemployed women, down 70,000.

(2) Unemployment rate
The unemployment rate was 3.4%, a 0.2 point decrease from the previous year. By gender, the unemployment rate was 3.6% for men, down 0.1 point, and 3.1% for women, down 0.3 point.
By age group, the unemployment rate fell for men aged 15-24 years, 35-44 years, and 65 years or over and for women in all age groups.

Consumer Prices
The consumer price index in April was 103.4 (2010 = 100), up 0.2 point over the previous month and down 0.3% from the same month of the previous year. The inflation rate remains far below the 2% target set by the Bank of Japan, which expects to achieve that goal around the second half of the fiscal year starting April 2017.

April 2016
Index Monthly
change (%)
Annual
change (%)
All items 103.4 0.2 –0.3
All items, less fresh food 102.9 0.3 –0.3
All items, less food (less alcoholic beverages) and energy 101.7 0.3 0.7
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