Japan jobless rate hits lowest in almost 2 years, economic outlook still shaky

Japan’s jobless rate unexpectedly fell to 2.6% in March, hitting the lowest rate since April 2020, although the number of furloughed workers remained high due to effects of the pandemic, official data showed on Tuesday.

The world’s third-biggest economy has been struggling to drive a sure-footed recovery from the COVID-19 pandemic, with the Ukraine war adding to the growing risks.

The data showed some resilience in the labour market, however. The seasonally-adjusted unemployment rate was lower than the median forecast for 2.7% in a Reuters poll of economists, which was also the reading in February.

Compared with a month earlier, the number of workers increased by 180,000 while that of those unemployed decreased by 90,000 in March, the data showed, after adjusting for seasonality.

“The drop in unemployment rate indicates signs of recovery” in the labour market, a government official told a media briefing.

“But the impact of the pandemic appears to be lingering and requires close attention,” he added, referring to the number of furloughed workers that remained as high as 2.43 million in March, primarily among face-to-face service sectors.

The jobs-to-applicants ratio was 1.22 in March, labour ministry data showed, in line with a Reuters poll forecast and rising 0.01 point from the previous month’s 1.21.