Private consumption was also increasing moderately on the back of an improvement in the employment and income situation. Labor market conditions have remained tight as Japan's economy has maintained its expanding trend. The unemployment rate has been at a low level of around 2.5 percent, and the active job openings-to-applicants ratio has remained at a high level.
Firms' perception of a labor shortage, suggested by the diffusion index for employment conditions in the June Tankan (Short-Term Economic Survey of Enterprises in Japan), remained at a high level in a wide range of industries (Chart 4).