Job gains remained very strong in January, while the supply of labor has continued to lag.1 As of the end of December, there were 1.9 job openings for each unemployed individual, close to the all-time peak recorded last March, while unemployment insurance claims have remained near historical lows.
Firstly, the decline in external demand, which had been a constraining factor of the economic recovery, halted in autumn 1996, mainly due to the increase in exports that followed a depreciation of the yen. Recently, there has been an upward trend in external demand. In addition, inventory adjustment in some raw materials and semiconductor industries was almost completed.