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No.248 (2017/11/20)
Economic and Labour Situation in Japan (November 2017)

Newly re-elected Japanese Prime Minister Shinzo Abe has said he will challenge action assignment related to Japan’s rapidly aging population. As immediate tasks, he will provide free day-care services, increase support for financially struggling young people seeking higher education, and raise wages for caregivers. He will also remain committed to the policy of beating deflation, including budgets and taxes, with particular focus on boosting stagnant productivity and encouraging the development of talent.

Industrial Production
The industrial production preliminary report for September showed movement to be picking up. While production and shipments decreased, inventories remained flat and inventory ratio increased from the previous month.

2010 average=100
  Seasonally adjusted index Original index
  Index Change from
previous month (%)
Index Change from
previous year (%)
Production 102.4 –1.1 106.1 2.5
Shipments 99.2 –2.6 105.0 1.4
Inventories 107.3 0.0 107.1 –2.4
Inventory ratio 110.3 1.6 105.9 –2.8

Industries that mainly contributed to the increase were as follows: (1) electronic parts and devices, (2) general-purpose, production, and business-oriented machinery, and (3) fabricated metals, in that order.

According to the Survey of Production Forecast, industrial production was expected to increase by 4.7% in October and decrease by 0.9% in November.

Family Income and Expenditure Survey in September
Real consumption contracted by 0.3%, mainly in the field of durable goods. Furniture and household utensils decreased by 5.4% in nominal terms and 5.2% in real terms.

(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in September was 268,802 yen, up 0.6% in nominal terms but down 0.3% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 437,497 yen, up 3.0% in nominal terms and 2.1% in real terms year-on-year. The average consumption expenditure was 295,211 yen, down 0.4% in nominal terms and 1.3% in real terms year-on-year.

Labour Force Survey Monthly Results

(1) Employment
The number of employed persons in September was 65.96 million, an increase of 740,000, or 1.1%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in September was 1.9 million, a decrease of 140,000, or 6.9%, from the same month in the previous year. The seasonally adjusted unemployment rate in September was unchanged at 2.8%, remaining at the lowest level in 23 years. The unemployment rate for men was 2.9%, down 0.1 point from the previous month, and for women 2.7%, up 0.2 point.

(10,000 persons)
  September
figures
Change from previous year
      (%)
Population aged 15 years or over 11,112 –1 0.0
Labour force 6,786 60 0.9
Employed persons 6,596 74 1.1
Employees 5,866 74 1.3
Unemployed persons 190 –14 –6.9
Not in labour force 4,321 –57 –1.3
Labour force participation rate (%) 61.1 0.6 -
Employment rate (%) 59.4 0.8 -
Unemployment rate, original series (%) 2.8 –0.2 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 2.8 0.0 -

(3) Job Availability
Japan's job availability in September was at the highest level since February 1974, with the ratio of job offers to jobseekers standing at 1.52, the same level as the previous month. This figure means that there were 152 jobs available for every 100 jobseekers.

The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.26, up 0.05 point over the previous month. This figure shows that there are more than two new vacancies available for every new jobseeker. Japan has likely achieved full employment and faces a severe labour shortage.

Consumer Prices
The consumer price index in September was 100.5 (2015 = 100), up 0.7% over the same month of the previous year. The inflation rate continues to hover around zero and remains far below the 2% target set by the Bank of Japan. Despite the seemingly improving economic activities in Japan over the past nine months, the core inflation index (CPI less food and energy) was up by only 0.2% year-on-year.

September 2017
Index Annual
change (%)
Monthly
change (%)
All items 100.5 0.7 0.0
All items, less fresh food 100.3 0.7 0.0
All items, less fresh food and energy 100.8 0.2 0.0
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