Japan's unemployment rate rises to 3% in Aug, highest in over 3 years

Japan's unemployment rate rose from 2.9 percent in July to 3 percent in August for the first time in over three years as the coronavirus pandemic continued to weigh on business activities, according to government data released on Friday (Oct.2). The jobless rate hit its worst level since the 3.1 percent recorded in May 2017.

Before seasonal adjustment, the number of unemployed people increased 490,000 from a year earlier to 2.06 million. It topped two million for the first time since May 2017.

Separate data from the labor ministry showed that the job availability ratio in August deteriorated to 1.04 from 1.08 in the previous month, down for the eighth month in a row and marking its lowest level since January 2014. The ratio means there were 104 job openings for every 100 job seekers.

The latest figures suggest that more business operators have become unable to maintain their workforce after the virus dented consumption and some were forced to cut operating hours. With the country facing severe labor shortages due to the rapidly aging population, the jobless rate of 3.0 percent is still low compared to other major economies.

The world's third-largest economy has seen its economy contract an annualized real 28.1 percent in the April-June quarter as the government declared a state of emergency over the pandemic in April and asked people to refrain from nonessential outings.

The non-adjusted number of people in work fell from a year earlier for the fifth consecutive month. It dropped 750,000 to 66.76 million, including 29.54 million women, down 480,000.

By industry, the accommodation and restaurant services sector, one of the industries hit hardest by the pandemic, saw the largest fall in the number of workers, losing 280,000 from the previous year to 3.91 million. In the manufacturing sector, the number fell by 520,000 to 10.26 million.

The number of people not in the labor force grew 110,000 from a year earlier to 41.88 million, up for the fifth successive month.

On a seasonally adjusted basis, 710,000 people among those unemployed voluntarily left their jobs, down 10,000 from a month earlier, while 590,000 were laid off, up 30,000, and 530,000 were new job seekers, up 40,000.