With the number of employees increasing at a relatively high pace, the active job openings-to-applicants ratio has been 1.34, marking the highest level seen since 1991, while the unemployment rate has been 3.2 percent, the lowest level seen since 1997 (Chart 3). Furthermore, the employment conditions DI in the March Tankan indicates that many firms feel that there is a shortage of labor.
These labor market conditions mean that Japan’s economy can be regarded as being at full employment. Because of the continued tightening of labor market conditions, there is growing upward pressure on wages. This clearly can be seen in the relatively large increase in part-time employees’ hourly cash earnings, which tend to closely reflect supply and demand conditions in the labor market.