Japan’s unemployment rate fell to its lowest in 16 years in May.

It was 3.5 percent of the workforce – a level Japan’s central bank considers to be near full employment.

At the same time, the availability of jobs rose to its highest level since 1992.

That suggests the world’s third-largest economy will rebound in the third quarter from a slump in consumer spending following a sales tax increase to eight percent from five percent.

As the jobs numbers were released we learned Japan’s household spending fell eight percent in the year to May, linked to the sales tax hike.

The bigger than expected drop was due mainly to a pull-back in spending on housing, cars and household appliances – all of which saw a surge in demand before the sales tax went up on April 1.

People did spend more on items such as television sets, personal computers and clothing in May. Spending on eating out also stopped falling.

with Reuters