Job-to-applicant ratio increased for the first time since the pandemic, says Japan’s Ministry of Health, Labor and Welfare

According to the latest government data, Japan’s average employment availability ratio improved for the first time in three years in fiscal 2021, owing to the steady economic recovery from the effects of the coronavirus outbreak. The world’s third-largest economy has been battling to recover from the COVID-19 pandemic, with the Ukraine conflict aggravating the troubles.

Official data showed that Japan’s unemployment rate surprisingly decreased to 2.6 percent in March, the lowest level since April 2020, despite the fact that the number of furloughed workers remained high due to the pandemic’s effects.

For the year ending in March, the job-to-applicant ratio increased from 0.06 points to 1.16, indicating that there were 116 job vacancies for every 100 job seekers. However, the figure was still low when compared to pre-pandemic levels, which was 1.55 in the fiscal year through March 2020, before the pandemic hit the economy.

Workers in healthcare and welfare increased by 180,000 from the previous year to 8.92 million, and in telecommunications increased by 140,000 to 2.59 million, among other industries.

In fiscal 2021, Japan had an average of 35.94 million regular workers per month, up 190,000 from the previous year, and 20.77 million non-regular workers, up 30,000 from the previous year.

A government official told a media briefing that the decline in the unemployment rate “indicates signals of improvement” in the labor market. “However, the pandemic’s impact looks to be lingering and requires close attention,” he continued, alluding to the number of furloughed workers, which remained at 2.43 million in March, with most of those affected working in face-to-face service industries.

Prime Minister Fumio Kishida is expected to announce new steps to boost families and businesses as early as Tuesday evening, despite salary increases failing to keep pace with rising energy costs. Shunichi Suzuki, Japan’s finance minister, has stated repeatedly on record that any increased spending will be financed by existing reserve money.

“And the economy steadily recovers as the pandemic fades, job figures are improving,” says Hiroaki Muto, an analyst at Sumitomo Life Insurance Co. “However, the labor market is not tightening quickly enough to raise wages. Companies here, unlike in the United States, do not normally try to compensate for labor shortages by raising wages.”

According to Nikkei financial newspaper, Japan’s government aims to spend 6.2 trillion yen ($48.6 billion) on steps to assist counteract rising costs.