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Mixed Data, Labour Market Trends Appear Steady

JAPAN DATA

Japan's March job data was mixed. The jobless rate was at 2.6%, against a 2.5% forecast but unchanged from Feb's outcome. The job to applicant ratio was 1.28, against a 1.26 forecast and 1.26 prior.

  • The broader labour market picture is unchanged compared to late 2023 trends, the chart below plots the job to applicant ratio (which is inverted on the chart) against the unemployment rate.
  • Arguably we need to see much higher job-to-applicant ratio levels to bring about a lower unemployment rate (i.e. back to pre Covid levels).
  • The detail showed a decent rise in the new applicants to job ratio to 2.38 from 2.26. Still, total applicants and job offers were down in m/m terms, with applicants off by more, hence the rise in the ratio.
  • Other data showed retail sales for March weaker than forecast: -1.2% m/m and down to 1.2% y/y. IP was close to forecast at +3.8% m/m, but still -6.7% y/y. METI expects solid April and May gains for IP.

Fig 1: Japan Job-To-Applicant Ratio (Inverted) Versus Unemployment Rate

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Japan's March job data was mixed. The jobless rate was at 2.6%, against a 2.5% forecast but unchanged from Feb's outcome. The job to applicant ratio was 1.28, against a 1.26 forecast and 1.26 prior.

  • The broader labour market picture is unchanged compared to late 2023 trends, the chart below plots the job to applicant ratio (which is inverted on the chart) against the unemployment rate.
  • Arguably we need to see much higher job-to-applicant ratio levels to bring about a lower unemployment rate (i.e. back to pre Covid levels).
  • The detail showed a decent rise in the new applicants to job ratio to 2.38 from 2.26. Still, total applicants and job offers were down in m/m terms, with applicants off by more, hence the rise in the ratio.
  • Other data showed retail sales for March weaker than forecast: -1.2% m/m and down to 1.2% y/y. IP was close to forecast at +3.8% m/m, but still -6.7% y/y. METI expects solid April and May gains for IP.

Fig 1: Japan Job-To-Applicant Ratio (Inverted) Versus Unemployment Rate

Keep reading...Show less