Japan’s jobless rate seems to have stayed flat at 3 pct in September

Japan’s jobless rate is expected to have remained flat in September. According to a Societe Generale research report, the unemployment rate is likely to have stayed at the August level of 3.1 percent. With the corporate hiring activities continue to be strong because of a robust perception of labor storage, the increased labor participation, the workforce is being absorbed entirely and has resulted in employment to increase steadily.

Unemployment is expected to drop below 3 percent, while wage increases are likely to spread to permanent in 2017, stated Societe Generale. According to some, the jobless rate is unlikely to drop further as the structural lower bound is 3 percent. But since no queues of people demanding goods and services have been observed, the actual structural lower bound of the jobless rate is expected to be below 3 percent.

The job-to-applicant ratio is expected to have risen a tad in September to 1.38, the highest level since August 1991, said Societe Generale. It is possibly becoming challenging for companies to hire new employees. The Bank of Japan’s Tankan for Small and Medium Enterprises Lending DI rose to 21 in the third quarter of 2016. This is the highest level since the fourth quarter of 1989. This implies that unemployment would continue to decline, added Societe Generale.