The active job openings-to-applicants ratio and the diffusion index for employment conditions in the December 2015 Short-Term Economic Survey of Enterprises in Japan (Tankan) have improved to almost the same levels as around the first half of 1992. Moreover, the unemployment rate has been declining and in the range of 3.0–3.5 percent for the first time since 1997.
The labor market is in a situation close to “full employment,” where unemployment is due solely to mismatches between job openings and job applicants (Chart 2). Reflecting the tightening of labor market conditions, employee income has been increasing moderately. Under such steady improvement in the employment and income situation, private consumption has been resilient.