Why Japans 4.4% Rate of Unemployment is Deceiving

Posted on November 29, 2011


The Japan Statistics Bureau reported that the seasonally adjusted unemployment rate was 4.4 percent in October, up 0.4 from the previous month. The low unemployment rate looks great until you realize that after a long period of slow to no growth, a very low number of people even bother to look for work in Japan.  

Japan has a lower labor force participation rate and employment-to-population ratio than the US.  I hope this does not imply what the US market labor market will look like after twenty years of supporting zombie banks instead of productive activity. 

I wrote an article about this that was published exclusively at SeekingAlpha.com entitled, “Has The Size Of The U.S. Labor Force Reached Its Peak?”. Let us hope this is not the case.

Japan Labor Market
  Previous Consensus Actual
Unemployment Rate 4.1% 4.1% 4.4%
Labor Force Participation Rate 59.0%   59.3%
Employment Rate 56.6%   56.6%
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