Japanese labour market conditions remain incredibly strong, according to data released by the Japanese government today.
However, it’s not been enough to lift household spending levels.
The national unemployment rate held steady at 2.8% in July, leaving it sitting at the equal-lowest level since October 1993.
The result was in line with market expectations.
Underlining just how tight labour market conditions are at present, the jobs-to-applicants ratio rose to 1.52 from 1.51 in June, leaving it sitting at the highest level since February 1974.
The ratio measures the number of jobs available compared to the number of active job seekers. That means that for every 100 people seeking work in July, there were 152 jobs available.
That reflects not only improved economic conditions in Japan in the first half of 2017, but also the nation’s rapidly-ageing demographics which are limiting the availability of labour.
However, despite those strong results, it was not enough to encourage a lift in household spending levels.
The government said that spending fell by 1.9% in July, completely reversing a 1.5% increase in June. The result was well below expectations for a smaller decline of 0.5% and saw spending levels drop 0.2% from the levels of a year earlier.
Markets had been expecting an increase of 0.7%.
The result is a disappointing outcome, especially given household consumption, the largest part of the Japanese economy at around 60%, helped to power GDP growth to the strongest increase since the start of 2015 in the June quarter of this year.
The data has caused a negligible reaction across financial markets with traders understandably focused on heightened geopolitical tensions on the Korean Peninsula following another missile test from the North earlier in the session.