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Economy

Japan jobless rate has 1st drop in five months in November

Analysts say improvement could easily fade if stimulus measures are taken away

(Photo by Yo Inoue) 

TOKYO -- Japan's unemployment rate stood at 2.9% in November, compared with 3.1% the previous month, the statistics bureau said on Friday, as the job market continues to reel from the fallout of the coronavirus pandemic.

The improvement, the first in five months, is the latest indication that economic stimulus measures by the government and the central bank are working. "The data confirm that the pace of deterioration in the job market is still gradual," said Takuya Hoshino, economist at Dai-ichi Life Research Institute. "It is too early to conclude that the worst is behind us, however. Employment could worsen again as soon as government support is taken away."

Joblessness dipped in June but resumed the ascent again between July-October.

In November, a fresh wave of coronavirus infections hit Japan, raising concern about a slowdown in the recovery from the deep slump earlier in the year.

Overseas, the month saw mixed news as a Pfizer vaccine was found to be effective but a lockdown was reimposed in Europe.

Consumer behavior apparently has changed since this spring, when a surge in infections led to a declaration of a national state of emergency, bringing private economic activity to a standstill. Despite another wave of infections now, many people go out to shop and dine. However, Hoshino cautions against thinking that Japanese consumers have become less cautious. "Although the number of infections is much smaller than in the U.S. or in Europe, Japanese people still take precautions again infection. Private consumption hasn't yet fully recovered," he said.

Japan's economy has been recovering gradually from a national state of emergency in April and May, led by exports of cars, electronics and capital goods.

In separately released data, the ratio of job openings to applicants, a leading indicator of the labor market, came to 1.06 in November, versus 1.04 in October, marking a second straight month of improvement. A reading of above 1 indicates that there are more available jobs than people seeking employment.

The job availability gauge hit 1.63 last year, its highest in 45 years, due to the nation's shrinking and aging population. The government has been pulling out all the stops to keep the economy from falling back into deflation.

Earlier this month, the government of Prime Minister Yoshihide Suga announced a third stimulus package for the current fiscal year, which started in April, while the Bank of Japan extended an emergency funding program by six months through September in an effort to support businesses that are hit hard by the pandemic and to help them adapt to a new business environment.

The government currently pays up to 100% of the wages of employees who no longer have work to do but are kept on the payroll. The program will stay in place through February, and the government is considering an extension through June, although on a somewhat reduced scale. The government is also providing support for businesses lending their workers to other industries on a temporary basis.

"In an ideal world, workers would design their own career, get training and find employment by themselves," Hoshino said. But if that is not immediately possible, it is necessary for businesses to find work for their employees and for the government to provide support, he said. "It is important to avoid prematurely ending public support," he added.

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