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Japan's Aug. jobless rate rises to 3%, highest in 3 yrs due to virus

Job seekers wait their turn for consultations at a HelloWork job center in Tokyo on Aug. 31, 2020. (Kyodo)

TOKYO (Kyodo) -- Japan's unemployment rate reached the 3 percent level in August for the first time in over three years as the new coronavirus pandemic continued to weigh on business activities, government data showed Friday.

    The jobless rate edged up to 3.0 percent from 2.9 percent in July, rising for the second straight month to hit its worst level since the 3.1 percent recorded in May 2017, according to the Ministry of Internal Affairs and Communications.

    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 with some 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 number of unemployed before adjustment is up, and that of the employed is down, so we can say that the coronavirus infection has continued to affect" the state of employment, a government official told reporters.

    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.

    Shinya Kotera, a senior economist at the Mizuho Research Institute, said some of the people who were forced to leave their job during the state emergency have started to look for a new job, which is a major reason for the deterioration of the unemployment rate and job availability ratio.

    Kotera predicts that the unemployment rate could rise to the lower half of the 3 percent range by the end of this year, and then go down at a very moderate pace, "on the assumption that the virus won't spread on a large scale and that measures like the emergency declaration in April wouldn't be repeated."

    "When the virus began to spread in Japan (in spring), it was said that the jobless rate could soar, but the situation appears less serious than initially expected," Kotera said. "On the other hand, some unemployed will continue to face difficulty in job hunting in the long run, which is a matter of concern."

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