Japan’s Trade Surplus Dips 19% in May : Economic Growth Fuels Demand for Imports

Strong economic growth cut the broadest measure of Japan’s trade surplus by 19% in May from a year earlier and pushed down the jobless rate to a three-year low of 2.5%, the government said today.

The surplus in the current account, the broadest measure of a nation’s commerce, including trade in goods and services as well as capital transfers, fell to $5.79 billion from $7.12 billion in April and $7.11 billion in May, 1987, the government said.

May was the second month in a row that the surplus declined from both previous-month and year-earlier levels.

During the first three months of the year, Japan’s economy grew at an annual rate of 11.3%, its highest level in 11 years.

Jobs Higher

The expansion of the economy fueled heavy demand for imports, including steel, lumber and non-ferrous metals, the Finance Ministry said. Exports were led by such products as computers and semiconductors.

Unemployment in May fell 0.1 percentage point from the previous month to a seasonally adjusted 2.5%, the Management and Coordination Agency said. The May rate represented a sharp turnaround from the record high of 3.2% registered in the same month a year earlier.

The number of job holders hit a record 61 million, up 2.2% from 59.8 million a year earlier.

The official said the number of jobs increased in virtually all industrial sectors, with companies becoming increasingly eager to hire new workers to meet growing demand.

The chief exception was agriculture, which registered a drop of 50,000 jobs during the month, the agency said.

A 2.5% unemployment rate was last registered in April, 1985.

Japan’s unemployment rate would be higher if calculated by U.S. and European methods.