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No.239 (2017/7/7)
Economic and Labour Situation in Japan (July 2017)

In the previous issue we reported that Japan had registered economic expansion for the fifth straight quarter, a remarkable growth streak that the country had not experienced since 2006. The sluggish growth in real wages, however, suggests that the benefits of the recent recovery have yet to fully reach Japanese households. Separate data shows that household consumption fell more than expected in May due to lower spending on clothing, footwear, and food, signaling that consumer spending continues to lag behind improvement in other areas of the economy..

Industrial Production
The industrial production preliminary report for May showed movement to be picking up, although production and shipments decreased from the previous month. Inventories increased, but inventory ratio also fell.

2010 average=100
  Seasonally adjusted index Original index
  Index Change from
previous month (%)
Index Change from
previous year (%)
Production 100.4 -3.3 95.4 6.8
Shipments 98.3 -2.8 91.4 5.5
Inventories 111.4 0.1 110.6 -1.2
Inventory ratio 112.5 -1.9 119.8 -3.6

Industries that mainly contributed to the increase were petroleum and coal products. Industries that mainly contributed to the decrease were as follows: (1) transport equipment, (2) iron and steel, and (3) electronic parts and devices, in that order.

According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 2.8% in June and decrease by 0.1% in July.

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 May was 283,056 yen, up 0.4% in nominal terms but down 0.1% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 421,497 yen, down 1.2% in nominal terms and 1.7% in real terms year-on-year. The average consumption expenditure was 315,194 yen, down 2.8% in nominal terms and up 2.3% in real terms year-on-year.

Labour Force Survey Monthly Results

(1) Employment
The number of employed persons in May was 65.47 million, an increase of 760,000, or 1.2%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in May was 2.10 million, a decrease of 70,000, or 3.2%, from the same month in the previous year. The seasonally adjusted unemployment rate in May was 3.1%, up 0.3 point over the previous month. The unemployment rate for men was 3.2%, up 0.3 point, and for women 2.9%, up 0.3 point over the previous month.

(10,000 persons)
  May figures Change from previous year
Population aged 15 years or over 11,107 -2 0.0
Labour force 6,657 70 1.0
Employed persons 6,547 76 1.2
Employees 5,796 57 1.0
Unemployed persons 210 -7 -3.2
Not in labour force 4,344 -73 -1.7
Labour force participation rate (%) 60.8 0.7 -
Employment rate (%) 60.8 0.7 -
Unemployment rate, original series (%) 3.1 -0.1 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.1 0.3 -

(3) Job Availability
Japan's job availability in May was at the highest level since February 1974, with the ratio of job offers to jobseekers standing at 1.49, up 0.01 point over the previous month. This figure means that there were 149 jobs available for every 100 jobseekers. The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.31, up 0.18 point over 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 May was 100.4 (2015 = 100), up 0.4% 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 in the past six months, core inflation measures( CPI less food and energy) remain stubbornly close to zero.

May 2017
Index Annual
change (%)
change (%)
All items 100.4 0.4 0.0
All items, less fresh food 100.3 0.4 0.0
All items, less food (less alcoholic beverages) and energy 100.8 0.0 0.1
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