Japan's average unemployment rate in 2024 fell 0.1 percentage point from a year earlier to 2.5 percent, as fewer workers were dismissed amid a labor shortage, government data showed Friday.

The average job availability ratio last year fell 0.06 point from the previous year to 1.25, marking the first decline in three years, as labor demand moderated after surging on the back of an economic recovery from the COVID-19 pandemic, according to separate data.

The job availability ratio indicates that there were 125 job openings for every 100 job seekers, the Ministry of Health, Labor and Welfare said. The ratio remained below the pre-pandemic level of 1.60 in 2019.

"The employment situation has been solid, recovering at a modest pace," labor minister Takamaro Fukuoka said at a news conference.

The average jobless rate last year was the lowest since 2019, when it stood at 2.4 percent before the pandemic, the Ministry of Internal Affairs and Communications said.

The number of unemployed people decreased by 20,000 to 1.76 million, falling for the third consecutive year, while that of employed individuals grew by 340,000 to a record-high 67.81 million, up for the fourth straight year, according to the ministry.

The non-labor force population, meaning people neither employed nor seeking jobs, declined by 530,000 to 40.31 million in 2024, marking the fourth consecutive year of decline.

"I believe the labor market has been expanding as more people joined the workforce from outside the labor force," a ministry official said.

Of those not in work, the number of people dismissed by their employers decreased by 30,000 from 2023 to 220,000, while that of individuals who left their jobs voluntarily, typically in search of better opportunities, remained unchanged at 750,000.

The ministry official suggested that the decline in dismissals indicated many of those workers quickly found new jobs after being laid off.

In December, the unemployment rate fell 0.1 point to 2.4 percent, improving for the first time in three months, the ministry said.

In the reporting month, the job availability ratio was unchanged from the previous month at 1.25, according to the labor ministry.

By industry, there were 9.3 percent more new jobs in the information and communication sector in December compared with a year earlier. The hotel and restaurant sector also saw a 5.2 percent rise.

In contrast, new job openings plunged 8.6 percent in the lifestyle and entertainment sector and dropped 7.6 percent in manufacturing.