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Economic and Labour Situation in Japan (July 2014)

Industrial Production
Industrial production in May increased by 0.5% over the previous month for the first increase in two months; it was up 0.8% year-on-year. The index in May was 99.8 (seasonally adjusted).

Industries that mainly contributed to the increase were as follows: (1) transport equipment, (2) textiles, and (3) electronic parts and devices, in that order.

Commodities that mainly contributed to the increase were as follows: (1) reaction vessels, (2) machining centers, and (3) large passenger cars, in that order.

According to the Survey of Production Forecast in Manufacturing, production was expected to decrease by 0.7% in June and increase by 1.5% in July.

Family Income and Expenditure Survey in May
The three-point consumption tax increase in April has dragged down household spending.

(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in May was 271,411 yen, down 3.9% in nominal terms and down 8.0% in real terms year-on-year after a 4.6% drop in April.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 421,117 yen, down 0.4% in nominal terms and down 4.6% in real terms year-on-year.

The average consumption expenditure was 293,050 yen, down 4.8% in nominal terms and down 8.8% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in May was 63.97 million, an increase of 570,000, or 0.9%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in May was 2.42 million, a decrease of 370,000, or 13.3%, from the same month in the previous year.

The seasonally adjusted unemployment rate was 3.5%, registering the lowest level for 16 years.

(10,000 persons)
  May figures Change from previous year
Population aged 15 years or over 11,080 –7 –0.1
Labour force 6,639 20 0.3
Employed persons 6,397 57 0.9
Employees 5,591 37 0.7
Unemployed persons 242 –37 –13.3
Not in labour force 4,435 –26 –0.6
Labour force participation rate (%) 59.9 0.2 -
Employment rate (%) 57.7 0.5 -
Unemployment rate, original series (%) 3.6 –0.6 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.5 –0.1 -

Japan's job availability improved in May to its best level in over 22 years, suggesting that companies are keen to hire more workers amid the economic recovery. Job availability in May improved 0.01 points over the previous month, with the ratio of job offers to jobseekers standing at 1.09. This figure means that there were 109 jobs available for every 100 jobseekers.

Consumer Prices
The consumer price index in May was 103.5 (2010 = 100), up 0.4% over the previous month, up 3.7% over the same month of the previous year, and registering the highest level in 32 years as the April consumption tax hike lifted the prices of a broad range of items. The Bank of Japan estimated that the tax hike would add 1.7 percentage points to Japan's annual consumer inflation in April and 2.0 points in May when payments of public utility charges are added.

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