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Thursday, October 1, 2009

Japan's Odd Labor Report

Bloomberg reports:

Japan’s unemployment rate unexpectedly retreated in August from a postwar record.

The jobless rate fell to 5.5 percent from a record 5.7 percent in July, the statistics bureau said today in Tokyo. The median forecast of economists surveyed by Bloomberg was for an increase to 5.8 percent.

“It’s still too early” to say the worst is over for Japan’s workers, said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. “Companies still have too many employees and too much capacity.”
While the unemployment rate did slide from 5.7% to 5.5% on a seasonally adjusted basis, it was flat on a non-seasonally adjusted basis at 5.4%. But it was an odd report and one should be skeptical of any single data point that is odd. Here is the oddness...

  • The number of employed rose... fine
  • The number of those unemployed rose... hmm
  • They both rose? Because the labor force spiked
  • But what did fall? The overall population


Is this just a case of more people taking part-time labor (and joining the labor force) or something else?

Source: Stat.Go.JP

Update:

Paul D's theory:

August is when college students graduate and join the workforce. That plus the passing away of elderly pensioners could easily explain the growth in the size of the workforce.
Update #2:

Is apparently wrong:

The hiring season in Japan is in March - April, not August.