Japan, the world’s third biggest economy, can’t find enough workers. According to government data released for the month of April, Japan now has 1.48 jobs for every applicant, up from 1.45 in March. This means that 148 jobs are now available in Japan for every 100 people looking for work. According to a Reuters report, this is the highest level of labour shortage Japan has seen in 40 years. Economists say that a tight labour market means higher wages and this could eventually spark a turnaround in consumer spending.
The unemployment rate held steady at 2.8 per cent in April, matching the lowest since June 1994. Japan’s economy grew in the first quarter at its fastest pace in a year to mark the longest period of expansion in a decade, thanks to robust exports and a helpful boost from private consumption. Japanese companies raised their spending on plant and equipment in January-March, underscoring a nascent pickup in the business investment needed for sustainable economic recovery and a decisive end to deflation.
Improving economic growth has been largely reliant on a recovery in exports and global demand, with domestic consumer spending remaining stubbornly weak. The Japan’s benchmark stock market index Nikkei on Friday topped the 20,000-point mark the first time since late 2015. Japan’s central bank last month maintained its projection that price growth will reach its 2 per cent target in fiscal 2018 on the assumption that a tight labour market will push up wages.
Ministry of Finance (MOF) data issued on Thursday showed companies raised capital expenditure in January-March by 4.5 per cent from the same period last year. It marked a second straight quarter of annual growth in capital expenditure after expansion of 3.8 per cent in the previous quarter.