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(CEP News) - Although Japanese unemployment fell unexpectedly to 4.0% against a projection for no change, economists say this does not paint the bigger picture and the labour market in Japan is still softening.
Hiroshi Shiraishi, economist with Lehman Brothers, said the lower unemployment figures aren't a reflection of more people being hired, but of a labour force that is shrinking. Furthermore, he pointed to the jobs-to-applicant ratio which declined more than expected to 0.89 from 0.91, and said overall that "the labour market seems to be softening up at a fairly gradual pace." Kyohei Morita, economist with Barclays Capital also pointed to the jobs-to-applicant ratio decrease as an indicator that "we can safely say the Japan employment situation is gradually worsening." Unemployment decreased only 0.1%, and Morita said the 0.1% fluctuation is par for the course "so we really don't have to be bothered." He said that by Japanese standards, 4.0% is still a high unemployment rate and that "the employment situation is growing insecure." Matt Robinson of Moody's economy.com blamed the gloomy labour situation on dampening corporate confidence. The overall sense is that corporations are delaying their hiring activity, he said. By Megan Ainscow,
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