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UNCLAS SECTION 01 OF 02 TOKYO 002512 
 
SIPDIS 
 
STATE FOR E, EEB AND EAP/J 
NSC FOR LOI, RUSSELL 
USTR FOR AUSTR CUTLER, BEEMAN, LEE, AND HOLLOWAY 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ELAB JA
SUBJECT: JAPAN'S UNEMPLOYMENT RATE IMPROVES 
 
¶1.  SUMMARY.  September saw Japan's unemployment rate improve 
from 5.5 percent to 5.3 percent.  Japan uses a slightly 
different method than the United States to calculate 
unemployment.  Also, the Hatoyama Administration announced an 
emergency measure that aims to create 100,000 new jobs by 
March 2014.  END SUMMARY. 
 
UNEMPLOYMENT RATE BEATS PREDICTIONS THAT IT WOULD WORSEN 
--------------------------------------------- ----------- 
 
¶2.  On October 30, Japan's Ministry of Internal Affairs and 
Communication announced unemployment had improved from 5.5 
percent in August to 5.3 percent in September.  This marks 
the second month of improvement coming after July figures hit 
5.7 percent, the highest level since such surveys began in 
¶1953.  Unemployment for men fell 0.2 percent to 5.6 percent, 
and for women it fell 0.1 percent to 4.9 percent.  The same 
day, the Ministry of Health, Labor, and Welfare (MHLW) 
announced that the job-to-applicants ratio also improved 0.01 
from the previous two months worst ever figure of 0.42 to 
0.43, meaning 43 jobs were available for every 100 job 
seekers.  MHLW also reported the number of job offers 
increased 1.5 percent, marking the strongest growth since 
March 2005, and the number of job seekers fell 1.6 percent, 
the first drop since April 2008.  Deputy Prime Minister Naoto 
Kan welcomed the numbers at a press conference and said that 
the overall economy was on a recovery trend, but he did 
express some concerns about deflationary pressure. 
 
¶3.  The improvement in the unemployment rate beats the 
predictions from both the Kyodo News and Nikkei economists 
surveys, which predicted unemployment would increase to 5.6 
percent in September.  Secretary General Hiroyuki Nagumo of 
the Japan Trade Union Confederation (Rengo), Japan's largest 
labor organization, predicted in a statement on October 23 
that Japan was likely to pass the 6 percent level for 
unemployment.  Reason for caution remains, however, as MIC 
reports the number of employed persons continued to decline 
for the 20th straight month, down 1.5 percent (980,000 
persons) to 62.95 million compared to September 2008.  The 
number of unemployed rose for the eleventh straight month, up 
33.9 percent (920,000 persons) to 3.63 million since last 
September.  Laid off employees accounted for 1.13 million of 
the total unemployed, a rise of 510,000 for the same period. 
 
DIFFERENCES BETWEEN U.S. AND JAPAN UNEMPLOMENT CALCULATION 
--------------------------------------------- ------------- 
 
¶4.  Japan calculates its umemployment in a slightly different 
manner than the United States.  According to the "Data Book 
of International Labor Statistics 2009," published by the 
Japan Institute for Labour Policy and Training (JILPT), both 
Japan and the United States follow the basic standards and 
definitions set by the International Labor Organization 
(ILO).  The ILO defines "unemployed" as "all persons over a 
certain age who are, during a set period of time, 1) not 
working, 2) are currently capable of working, and 3) are 
searching for jobs."  Substantial flexibility is allowed, 
however, to each country in defining these conditions, which 
makes uniform comparison difficult. 
 
¶5.  Unemployment in Japan is based on the "Labor Force 
Survey," and persons aged 15 and over who were not working, 
were capable of immediately accepting work, and had been 
seeking work during the survey week are considered 
unemployed.  Those awaiting results from past job searches 
are also counted as unemployed.  The unemployment rate is 
then calculated by dividing the number of unemployed by the 
total labor force, which, unlike in the United States, 
includes military personnel (members of the Japan Self 
Defence Forces). 
 
 
TOKYO 00002512  002 OF 002 
 
 
¶6.  For comparison purposes, the JILPT estimates that the 
2008 official unemployment rate for Japan of 4 percent would 
be 3.4 percent if U.S. definitions and calculation methods 
were employed.  The OECD, which conducts an international 
comparison of unemployment rates using harmonized ILO 
standards, calculated August 2009 unemployment rates at 9.7 
percent for the United States and 5.5 percent for Japan.  The 
OECD calculations match the announced U.S. and Japanese 
government figures for August. 
 
GOJ PACKAGE TO INCREASE EMPLOYMENT 
---------------------------------- 
¶7.  On October 23, the Hatoyama Administration announced a 
package that aims to create 100,000 jobs by March 2010.  The 
measures focus on increasing employment in areas with growth 
potential, such as nursing care, agriculture, tourism, and 
the environment.  Funds will go to bolster the popular Hello 
Work public job-placement centers that provide advice on 
employment and job training.  The package also contains 
provisions to provide emergency lodging and loans with easy 
terms to the unemployed. 
 
¶8.  Some in the media have criticized the plan for not 
providing specific targets for creating new jobs in each of 
the designated industries.  There are also complaints that 
the package is insufficient.  Financing for the program comes 
from the previous Liberal Democratic Party's budget, and the 
current Democratic Party of Japan administration has no plans 
to spend any new money on the programs. 
ROOS