Japan’s Jobless Rate Improves for First Time in Two Years

May 02, 2025 | News On Japan

TOKYO - Japan’s unemployment rate improved in fiscal 2024 for the first time in two years, falling by 0.1 percentage point from the previous year to 2.5 percent, according to government data released on May 2nd.

The recovery in the labor market comes despite ongoing concerns over inflation and hiring slowdowns in some sectors, and reflects continued tightness in the job market due to structural labor shortages.

For the fiscal year ending in March, the number of unemployed people fell by 30,000 to 1.75 million, while the number of those employed rose by 370,000 to 67.93 million. That figure marks the highest level since comparable statistics began in 1953, the Ministry of Internal Affairs and Communications said. Among the unemployed, those who lost their jobs through dismissal decreased by 20,000 to 220,000. The number of people who quit their jobs voluntarily, often in search of better opportunities, remained unchanged at 750,000.

A ministry official commented that even those who were laid off managed to find new employment due to the persistent labor shortage. However, the monthly data for March showed a slight increase in the unemployment rate to 2.5 percent, up from 2.4 percent in February, suggesting that while the broader annual trend remains positive, short-term fluctuations continue.

Separate data from the Ministry of Health, Labour and Welfare showed that the average job availability ratio in fiscal 2024 declined by 0.04 point to 1.25, marking the second straight year of decline. This ratio means there were 125 job openings for every 100 job seekers. Despite the fall, economist Kisuke Yoshii of the Daiwa Institute of Research said that the overall labor market remained tight, noting that the index was still above 1.00. "The labor shortage has not changed, and such a situation is likely to persist," he said.

In March, the job availability ratio rose slightly by 0.02 point from the previous month to 1.26. By sector, new job postings in the information and communications industry increased by 8.2 percent compared to a year earlier, while the accommodation and restaurant services sector saw a 3.3 percent rise. On the other hand, job offers declined in the retail and wholesale industry, down 7.7 percent, and in lifestyle and entertainment services, which fell by 6.9 percent. The mixed results across industries highlight the uneven nature of the recovery in Japan’s job market.

Source: TBS

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