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Economic and Labour Situation in Japan (March 2013)

New Cabinet Releases Fiscal 2013 Economic Outlook
Japan's gross domestic product (GDP) is expected to have grown by 1.0% in real terms in fiscal 2012 (ending on March 31, 2013), according to the Fiscal 2013 Economic Outlook recently released by the new cabinet led by Prime Minister Shinzo Abe. The nominal growth rate is expected to be 0.3%.
In fiscal 2013 (April 2013 - March 2014), the Japanese economy is likely to pick up somewhat as a result of an expected modest recovery of the world economy and greater domestic demand stimulated by implementation of the government's "Emergency Economic Measures for the Revitalization of the Japanese Economy." Regarding prices, the rate of increase in consumer prices is forecast to be approximately 0.5%. Due to an increase in the number of employees, the unemployment rate is likely to decrease.
Consequently, the GDP growth rate in fiscal 2013 is forecast to be around 2.5% in real terms and around 2.7% in nominal terms. Private consumption expenditure is expected to rise by 1.6% year-on-year as employment and income conditions improve. Industrial production is expected to turn upward as well due to a recovery in exports and increase in domestic demand (up by approximately 3.4% year-on-year).
Amid this expected moderate economic recovery, backed by the effects of emergency economic measures to create employment, the number of employees is forecast to increase by approximately 0.9% year-on-year and the unemployment rate to fall to approximately 3.9%.

Industrial Production
Industrial production shows signs of having bottomed out and some signs of picking up.
Industrial production in January 2013 increased by 1.0% over the previous month, registering an increase for the second consecutive month, though it was down 5.1% year-on-year. The index in January was 89.7 (seasonally adjusted).
Industries that mainly contributed to the increase were as follows: (1) transport equipment, (2) iron and steel, and (3) information and communication electronics equipment, in that order.
Commodities that mainly contributed to the increase were as follows: (1) metal oxide semiconductor ICs (memory), (2) large passenger cars, and (3) drive, transmission, and control parts, in that order.
According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 5.3% in February and by 2.3% in March.

Family Income and Expenditure Survey in January
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in January 2013 was 288,934 yen, up 2.1% year-on-year in both nominal and real terms.
(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 433,858 yen, up 0.8% in nominal terms and up 1.1% in real terms year-on-year.
The average consumption expenditure was 321,065 yen, up 3.8% in nominal terms and up 4.1% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in January 2013 was 62.28 million, an increase of 170,000, or 0.3%, over the same month in the previous year.
(2) Unemployment
The number of unemployed persons in January 2013 was 2.73 million, a decrease of 180,000, or 6.2%, from the same month in the previous year.
The seasonally adjusted unemployment rate was 4.2%, the same level as in the previous month.
According to a separate report released by the Ministry of Health, Labour and Welfare, job availability in January 2013 was up 0.02 points over the previous month, with the ratio of job offers to jobseekers standing at 0.85. This figure means that there were 85 jobs available for every 100 jobseekers.
Consumer Prices
The consumer price index in Japan in January 2013 was 99.1 (2010=100), down 0.3% from the previous month and down 0.2% from the same month in the previous year.

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