Japan’s jobless rate likely to have remained flat at 3 pct in October

Japan’s jobless rate is expected to have stayed flat in October. According to a Societe Generale research note, the nation’s unemployment rate is likely to have remained at September’s level of 3 percent. Abenomics’ progress on structural reforms has been criticised for being slow and stagnant. The recent data shows that corporate profit margins have reached historically high levels.

Companies have increased their hiring activities, given high profitability, as there is a strong perception of shortage of labor. The increased labor participants, which consist most of rises in the numbers of women and seniors entering workforce, are being absorbed totally and have resulted in a steady rise in employment, stated Societe Generale.

The job-to-applicant ratio has increased a bit in October to 1.39, the highest level since August 1991. As compared with the start of Abenomics in December of 2012, the number of job openings in September 2016 rose 27.9 percent, whereas the number of jobless people dropped 27.7 percent. In the same period, the working age population dropped 0.2 percent, whereas the labor force population rose 1.9 percent.

“Given that it will likely become progressively difficult for firms to hire new employees as the growth in the labour force population decreases in 2017, the unemployment rate will likely fall below 3 percent”, added Societe Generale.