Economic and Labor Situation in Japan, May 2025

Prime Minister Ishiba attended the central May Day rally organized by RENGO　(Japanese Trade Union Confederation) in Tokyo, where he expressed his strong determination to urge a review of U.S. tariff measures to ensure that wage increases would not be undermined.

In his May Day address, Prime Minister Ishiba presented a goal of raising the average minimum wage to 1,500 yen during the 2020s, stating, “We will ensure wage increases that can withstand rising prices.” He also emphasized his commitment to protecting Japanese workers in response to the tariff measures implemented by the Trump administration.

Governor Yuriko Koike introduced the enactment of a new Tokyo ordinance aimed at preventing customer harassment. She also advocated for the promotion of digitalization and gender equality.

RENGO President Tomoko Yoshino, marking the 80 years since the end of World War II, remarked, “The wage hike rate for small and medium-sized enterprises in this year’s spring labor negotiations has exceeded the previous year’s level, and the gap with large corporations is steadily narrowing.” She called on union members to stand united to maintain this positive momentum, adding, “We want this May Day to be a renewed commitment to our pursuit of peace into the future.”

At the rally, a special resolution on peace titled “Passing Peace on to the Next Generation: 80 Years Since the War” was adopted. The May Day declaration also called for correcting disparities between companies of different sizes, between employment types, and between men and women. It emphasized the need for fair price transfers and proper business practices, and for extending the foundation for wage increases to include small- and medium-sized businesses that lack labor unions.

Labour Force Survey Monthly Results¹

(1) The number of employed persons in March 2025 was 67.70 million, an increase of 440,000 over the same month the previous year. By gender, this included 36.84 million men, up 180,000, and 30.86 million women, up 260,000 from the previous year.

(2) Unemployment

The number of unemployed persons in March 2025 was 1.80 million, down 50,000 from the same month in the previous year.

The seasonally adjusted unemployment rate in March was 2.5%, up 0.1 over the same month the previous year. The unemployment rate was 2.7% for men, up 0.2, and 2.2% for women, down 0.1 from the same month the previous year.

The average unemployment rate in fiscal 2024 was 2.5% down 0.1 from one year prior.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in March stood at 1.26, up 0.02 over the previous month. This ratio means there were 126 job openings for every 100 job seekers.

The ratio of regular employee job offers to applicants was 1.05, up 0.02 over the previous month.

The ratio of new job offers to applicants, a leading indicator for the labor market, was 2.32, up 0.02 over the previous month. The number of new job offers decreased 3.0% from the same month the previous year. By industry, the information and communications and accommodation and food services sectors increased 8.2% and 3.3% respectively.

The living-related and personal services and amusement services sector decreased 6.9%.

Japan’s job availability ratio in fiscal 2024 fell 0.04 points from the previous year to 1.25, as companies curtailed recruiting practices amid pressure from rising materials costs.

Industrial Production²

Industrial Production Fluctuates Indecisively

Industrial output in March decreased 1.1% from the previous month. Production and shipments decreased, while inventory ratio and inventories increased. The industries that mainly contributed to this decrease were as follows: (1) motor vehicles; (2) electrical machinery, and information and communication electronics equipment; and (3) general-purpose and business oriented machinery, in that order.

According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 1.3% in April and increase 3.9% in May.

March  2025           2015 average = 100

Family Income and Expenditure Survey³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in March was 339,232 yen, up 6.4% in nominal terms and up 2.1% in real terms over the previous year.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 524,343 yen, up 2.1% in nominal terms but down 2.0% in real terms from the previous year. The average level of consumption expenditure was 382,959 yen per month, up 8.2% in nominal terms and up 3.8% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in March was 111.1 (2020 = 100), up 3.6% over the previous year and up 0.3% over the previous month. Core inflation (CPI less food and energy) was up 2.9% over the previous year and up 0.3% over the previous month, driven by higher rice prices. The inflation rate has remained at or above the Bank of Japan’s 2 percent price stability target since April 2022.

Prices for rice, Japan’s staple food, still soared 92.5% over the previous year, the fastest pace since comparable data became available in 1971. As the government reinstated its subsidies to alleviate the burden of utility bills on households between January and March, energy prices were up 6.6% from a year earlier, easing from a rise of 10.8% in January. Electricity prices rose 8.7%, sharply decelerating from an 18.0% climb in January, while prices for city gas grew 2.0%, also slowing from a 9.6% gain.

March 2025

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1. Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
(https://www.stat.go.jp/english/data/roudou/results/month/index.html)

2. Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
(https://www.meti.go.jp/english/statistics/tyo/iip/index.html)

3. Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)
(https://www.stat.go.jp/english/data/kakei/156.html)

4. Source: Consumer Price Index (Statistics Bureau of Japan)
(https HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html” HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html“://www.stat.go.jp/english/data/cpi/1581-z.html)