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No.216(2016/7/8)
Economic and Labour Situation in Japan (July 2016)

Industrial Production
Industrial production in May decreased by 2.3% from the previous month, registering a decrease for the first time in and down 0.1% year-on-year. The index in May was 95.0 (seasonally adjusted).
Industries that mainly contributed to the decrease were as follows: (1) chemicals (excl. drugs), (2) general-purpose, production, and business-oriented machinery, and (3) electronic parts and devices, in that order.
According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 1.7% in June and 1.3% in July.

Family Income and Expenditure Survey in May
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in May was 281,827 yen, down 1.6% in nominal terms and 1.1% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 426,805 yen, down 0.8% in nominal terms and 1.1% in real terms year-on-year. The average consumption expenditure was 306,721 yen, down 3.3% in nominal terms and 2.8% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in May was 64.46 million, an increase of 460,000, or 0.7%, over the previous year.

On a year-on-year basis, amid the aging of the country's population, the health care and welfare sector added 290,000 jobs for a total of 8.34 million, while the wholesale and retail sector saw a gain of 60,000 to 10.43 million. Weighed down by a strong yen and sluggish domestic consumption, however, the manufacturing sector saw a decrease of 40,000 jobs to 10.39 million.

(2) Unemployment
The number of unemployed persons in May was 2.16 million, a decrease of 800,000, or 3.6%, from the same month in the previous year. The seasonally adjusted unemployment rate in May was 3.2%, the same as in the previous month. The unemployment rate for men was unchanged at 3.4%, while that for women declined 0.1 point to 2.9%. The unemployment rate has reached its lowest level in the past 19 years.

(10,000 persons)
  May figures Change from previous year
      (%)
Population aged 15 years or over 11,076 0 0.0
Labour force 6,662 38 0.6
Employed persons 6,446 46 0.7
Employees 5,718 94 1.7
Unemployed persons 216 -8 -3.6
Not in labour force 4,409 -34 -0.8
Labour force participation rate (%) 60.1 0.3
Employment rate (%) 58.2 0.4
Unemployment rate, original series (%) 3.2 –0.2
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.2 0.0

(3) Job availability
Japan's job availability in May registered its best level in 24 years, with the ratio of job offers to jobseekers standing at 1.36, up 0.02 point over the previous month. This figure means that there were 136 jobs available for every 100 jobseekers. Japan has likely achieved full employment and faces a severe shortage of labour.

Consumer Prices
The consumer price index in May was 103.6 (2010 = 100), up 0.1 point over the previous month and down 0.4% from the same month of the previous year. The inflation rate remains far below the 2% target set by the Bank of Japan, which hopes to achieve that goal around the second half of the fiscal year starting April 2017.

May 2016
Index Monthly
change (%)
Annual
change (%)
All items 103.6 0.1 –0.4
All items, less fresh food 103.0 0.1 –0.4
All items, less food (less alcoholic beverages) and energy 101.8 0.1 0.6
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