Japan economy recovers with unemployment down

Japanese firms employed more full-time staff in April compared with a year earlier for the fourth month in a row and fewer part…

Japanese firms employed more full-time staff in April compared with a year earlier for the fourth month in a row and fewer part-timers for the first time in nearly a decade, highlighting the expanding benefits of a recovering economy.

The number of part-time workers fell 1.1 per cent from the same month last year, the first decline in nine years and 10 months, government data showed today.

In contrast, the number of full-time employees rose 1.1 per cent. It had risen for the first time in seven

The return of more full-time workers shows the whole employment picture is heading towards improvement.
Makoto Ishikawa, a senior economist at Japan Research Institute

years and four months in January.

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"The return of more full-time workers shows the whole employment picture is heading towards improvement. There's very little sense of excessive employment in the private sector now," said Makoto Ishikawa, a senior economist at Japan Research Institute.

Companies covered by the survey had a total of 43 million employees, of whom 32.4 million were full-time and 10.6 million part-time.

The data also showed regular monthly pay, excluding overtime, was up 0.3 per cent year-on-year, the first rise in 53 months. Overtime pay was up 1.6 per cent, up for the 33rd straight month.

The figures come on the heels of jobs data yesterday which showed Japan 's unemployment rate fell in April to 4.4 per cent, the lowest since December 1998.

Economists said there is still a long-term trend for firms to hire part-timers instead of full-time workers whenever possible, as they can pay less in benefits such as health insurance and pensions.

But companies have become more eager to hire full-time staff amid a business recovery, they said.

"Because of the economic recovery in the past three years, profits at Japanese firms are at historic highs. Companies with improved earnings are beginning to share the benefits with their employees," said Naoki Iizuka, chief economist at Dai-ichi Life Research Institute.

Economists said changing demographics may also be contributing to the change, as postwar baby-boomers retire and firms seek permanent replacements.

But Shun Maruyama, an economist at UFJ Institute, said the fall in part-time employment may also reflect uncertainty in the manufacturing sector.

"The shift to part-time labour has made it easier for companies to hire and fire more flexibly in response to economic trends," he said.

"Although I wouldn't deny that we may be seeing a lull in corporate restructuring, the latest fall in part-time workers may actually be a sign of weakness in output."

Japan 's industrial output rose 2.2 per cent in April after a 0.2 per cent dip in March. But the outlook is mixed, with the government forecasting manufacturers' output will fall 2.3 per cent in May and rise 1.4 per cent in June.