(3) Looking at the figures by industry, the medical, health care and welfare, and service industries show an increase over the previous year, while the construction and manufacturing industries are on a declining trend from the previous year. In addition, looking at the data by employment scale in non-agricultural industries, employment in large corporations with at least 1,000 employees began declining in the second half of 2004, while that in small enterprises with 1–29 employees continued to decline (Figure 4). Furthermore, figures for self-employed and family workers continued to decrease, although the rate of contraction from the previous year slowed.

## (Trends in the Labour Force and Non-labour Force Populations)

The labour force participation rate is on a declining trend. This is largely due to the growing influence of changing demographics associated with an aging society with a declining birthrate. The reduction of the labour force participation rate in each age group is another element tending to affect the decline in the labour force. Among persons not in the labour force who wish to work, those who are not seeking employment because they have "no prospect of finding a suitable job" (those who wish to work but are not looking) declined to 1.72 million in the first quarter of 2005.

## (Trends in the Unemployed)

The average number of unemployed persons during 2004 was 3.13 million, down 370,000 from the previous year, recording the second consecutive annual decline. Breaking down the figures by reason for seeking a job, those who left their previous jobs involuntarily, who had been at a high level, declined for the second straight year (Figure 5).

The average unemployment rate for males and females was 4.7%, the second consecutive annual decline, and this trend continued after entering 2005 (Figure 6). Looking at the figures by sex, the seasonally-adjusted number in the first quarter of 2005 for males was 4.8% while that for females was 4.2%. The figures were relatively favorable for females compared to males, as they have tended to be since about 1999.

Frequency of unemployment has declined for both males and females, the number of newly unemployed has declined, and duration of unemployment also showed signs of improvement. In addition, the long-term unemployment rate (the proportion of the unemployed who have been jobless for at least a year in the labour force) was 1.5% in the first quarter of 2005, showing a declining trend. The number of unemployed heads of households declined for the second consecutive year, to an average during 2004 of 800,000 (a decline of 150,000 from previous year).

## (Graduate Labour Market Trends)

The placement recruitment rate of new graduates in March 2005 showed signs of improvement.

## (Future Prospects for the Employment Situation)

Looking at trends in the regular employment index and the amount of non-scheduled hours during the current recovery (since the first quarter of 2002), the previous two recoveries (first quarter of 1999 and fourth quarter of 1993) were characterized by an increase in non-scheduled hours without a corresponding increase in the employment index. This recovery, however, is showing signs of such an increase, indicating that the employment situation is showing firm improvement during the current recovery.

Looking at the employment situation by region, although some improvement can be observed in regions where the industries leading the economic recovery are clustered, other regions have lagged behind this trend, causing regional discrepancies. Moreover, small and medium enterprises are still experiencing difficult conditions. As the economic recovery continues, it is necessary from now on to increase employment opportunities and vitalize small and medium enterprises in order to spread its benefits.