TOKYO – Japan’s unemployment rate dropped to 2.4 percent in January, three decimal points less than a month earlier, marking its lowest level in almost 25 years, the government announced on Friday.
This is the lowest unemployment rate the country has recorded since April 1993, when it had stood at 2.3 percent.
The number of unemployed people in the first month of 2018 stood at 1.54 million, a drop of 380,000 or 19.3 percent year-on-year, according to the ministry of internal affairs and communications.
The number of employed rose to 65.62 million, an increase of 920,000 individuals, or 1.4 percent as compared to January 2017.
Jobs open to every 100 applicants stood at 159, same as December, also the highest ratio since January 1974.
The figure, despite being positive, also reveals a growing labor crunch with a narrower pool to choose from and poses a growth challenge for the third biggest economy in the world, already battling the challenges of a rapidly aging population and labor shortages.
Experts also said a strong job market must translate into higher salaries, something that Japan has been trying to address for long.
Salary increment is a key factor of Abenomics, the economic plan of the government led by Prime Minister Shinzo Abe, which aims to create a circle of growth in corporate profits, salaries and consumption to end the deflationary spiral that has been affecting the economy for almost two decades.
The government increased pressure on the private sector to increase salaries, hoping to revive the economy by boosting consumption – the main driver of growth in the country – and in January urged firms to raise salaries by around 3 percent this year.