- Scott Bowman, Capital Economics
Japanese household spending continued to decline in July as the strongest labor market in at least two decades failed to boost wage growth significantly. Household spending fell 0.5% year-on-year in July, according to Japan's Statistics Bureau, the fifth-consecutive decline and the 21st month out of the last 24 that spending has fallen. Analysts had expected spending to fall 1.3% in July.
Meanwhile Japan's unemployment rate now sits at the lowest level seen in over 21 years. According to the Ministry of Internal Affairs and Communications, the unemployment rate fell to 3.0% last month in seasonally adjusted terms, down on the 3.1% level of June and expectations for an unchanged reading in July. It was the the lowest level since May 1995. Suggesting that labour market conditions continue to tighten, the nation's job to applicants ratio held steady at 1.37. Japan's tight labor market may mean that almost everyone who wants a job has one, but it hasn't helped to generate spending. Thus, for every 100 job seekers in July, there were approximately 137 positions available. While slightly below expectations for an increase to 1.38, the figure was the highest level seen since August 1991, and unchanged from the level seen in June.
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