Emergency reserves, high prices, rationing. How did Japan's rice crisis get this far?

TOKYO (AP) — Rice is essential to Japanese culture, tradition and politics. People take pride in the oval-shaped sticky Japonica grain, which is still a staple even though total consumption has fallen over the decades.

But since last summer, prices have soared as supplies have fallen short of demand. The government has long paid farmers to cut back on rice acreage, and change to other crops to keep rice prices relatively high.

To cope with shortfalls this year, the government has released rice reserves. But the grain has been slow to reach supermarket shelves. Anger over that was part of the reason the agriculture minister quit this week.

Consumers are frustrated and wondering where’s the rice?

Agriculture Minister Taku Eto resigned Wednesday after he raised an uproar by saying he “never had to buy rice,” because his supporters give it to him as gifts.

The remark was seen as utterly out of touch with the realities of ordinary people struggling to make ends meet and to afford rice to eat. Eto apologized, but he was obliged to step down as damage control by Prime Minister Shigeru Ishiba, whose minority government faces a big challenge in a crucial national election in July.

Eto's successor is former environment minister Shinjiro Koizumi, who has taken part in reforming Japan's powerful agriculture lobby. He's been tasked with investigating and resolving the rice problem.

Rice started disappearing from supermarket shelves, and prices surged to twice normal levels since last summer, when a warning about a possible “megaquake” triggered panic buying.

The top “Koshihikari” brand now sells for nearly 5,000 yen ($35) per 5 kilograms (11 pounds). Rice stocks at Japan Agricultural Cooperatives and other commercial wholesalers have been 400,000 tons short of last year's levels, hitting a record low 1.53 million tons as of June, farm ministry data show.

The sense of urgency over shortages has risen now that rice crops have just been planted, with harvests several months away.

Ishiba has pledged to bring the average rice price down to about 3,000 yen ($20) per 5 kilograms (11 pounds).

“We don't know why we haven’t been able to push prices lower," Ishiba said during parliamentary questioning Wednesday when asked how exactly his government will resolve the problem. “We first will figure out exactly how much rice there is and where it is."

He acknowledged current measures aren't working and blamed "structural problems” of the government's rice policy.

Experts say last summer's panic buying just worsened longstanding problems. A sharp rise in tourism and an increase in dining out have raised demand.

Some people started eating more rice after prices of bread and noodles rose when the Russia-Ukraine war pushed wheat prices higher. And the 2023 harvest was relatively poor because of hot weather and pests.

Japan’s rice supply chain is complicated. Most farmers still sell their rice in the traditional system run by Japan Agricultural Cooperatives, or JA, a powerful interest group with close ties to the governing Liberal Democratic Party.

But a growing share is sold through other businesses and online, making it hard to track supplies and prices, said Masayuki Kanamori, an executive of the National Federation of Agricultural Co-operative Associations, a JA umbrella organization.

The shortage caught JA by surprise, Kanamori said.

“Looking back, the current rice shortage was unforeseeable,” he said. "We are puzzled.”

The Agriculture Ministry is under fire for delaying releases of emergency rice reserves, which normally are kept for disasters, and for misjudging the demand-supply balance. So far, only 10% of the released rice stocks have reached the market, raising suspicions about what's happening.

Koizumi on Thursday announced plans to switch to voluntary government contracts for rice to better control prices and to lift a cap on the next sale.

One problem may be a lack of enough milling capacity to turn the stocks of brown rice kept in reserves into the pure white rice that Japanese prefer. But others have accused some wholesalers of hoarding rice to keep prices higher.

So far, the government has done little to investigate and resisted releasing reserves, fearing prices would fall, Kazuhito Yamashita, research director at the Canon Institute for Global Studies.

Japan could have avoided the problem by allowing more rice to be planted and exporting more if there were surpluses, he said.

“Acreage cutbacks are contrary to food security, a ruinous policy," Yamashita said. He said that the policy benefits JA by keeping small farmers afloat.

Meanwhile, farmers coping with rising costs say prices aren't too high.

Ultimately, Japan will need to figure out a long-term strategy since the average age of its farmers is 69, and the farming population has fallen by half over the past two decades to 1.1 million in 2024.

Hiromi Akaba, who lives in Kawasaki, near Tokyo, said that she had no choice but to buy rice at the current high prices. But she added: “If this continues, we will stop eating rice. This could lead to a shift away from rice consumption.”

Many stores are limiting customers to one bag of rice per visit.

Whatever the cause of the shortages, retailers must put rice on the shelves, so some are switching to imports, which usually aren't popular with finnicky Japanese shoppers.

Major supermarket chain operator Aeon Co. plans to sell U.S. grown Japonica “Calrose” rice at 600 outlets in major cities beginning next month. A 4-kilogram (nearly 9-pound) bag of Calrose will sell for 2,894 yen ($20). Aeon is buying 1.4 tons to tide it over until the autumn harvest, Aeon corporate communications official Hirokazu Satou said.

In the past, Aeon has sold Calrose blended with Japanese rice, and this will be the first time that it's selling bags of 100% Calrose, with suggestions like turning it into fried rice. The idea is to keep people eating rice, said Satou, who said he's worried they might just stop.

“We are worried that the ongoing rice shortages and soaring prices may accelerate that trend ... and we don't want it to happen,” he said.

Pedestrians are reflected in the window of a restaurant advertising for rice in Tokyo, Thursday, May 22, 2025. (AP Photo/Louise Delmotte)

An employee prepares a bowl of rice at a restaurant in Tokyo, Thursday, May 22, 2025. (AP Photo/Louise Delmotte)

Former Environment Minister Shinjiro Koizumi, center, is surrounded by reporters at the prime minister's office in Tokyo Wednesday, May 21, 2025. (Kyodo News via AP)

Large bags of several varieties of rice are sold at a supermarket in Hyuga, Miyazaki prefecture, southwestern Japan, on May 19, 2025. (Kyodo News via AP)

Japan's Agriculture Minister Taku Eto, center, arrives at the prime minister's office in Tokyo Wednesday, May 21, 2025. (Kyodo News via AP)

A rice field in Mito, Japan, where farmers are being encouraged to grow more of the staple crop to make up for shortages on store shelves, on Wednesday, May 22, 2025. (AP Photo/Elaine Kurtenbach)

WASHINGTON (AP) — Sluggish December hiring concluded a year of weak employment gains that have frustrated job seekers even though layoffs and unemployment have remained low.

Employers added just 50,000 jobs last month, nearly unchanged from a downwardly revised figure of 56,000 in November, the Labor Department said Friday. The unemployment rate slipped to 4.4%, its first decline since June, from 4.5% in November, a figure also revised lower.

The data suggests that businesses are reluctant to add workers even as economic growth has picked up. Many companies hired aggressively after the pandemic and no longer need to fill more jobs. Others have held back due to widespread uncertainty caused by President Donald Trump’s shifting tariff policies, elevated inflation, and the spread of artificial intelligence, which could alter or even replace some jobs.

Still, economists were encouraged by the drop in the unemployment rate, which had risen in the previous four straight reports. It had also alarmed officials at the Federal Reserve, prompting three cuts to the central bank's key interest rate last year. The decline lowered the odds of another rate reduction in January, economists said.

“The labor market looks to have stabilized, but at a slower pace of employment growth,” Blerina Uruci, chief economist at T. Rowe Price, said. There is no urgency for the Fed to cut rates further, for now."

Some Federal Reserve officials are concerned that inflation remains above their target of 2% annual growth, and hasn't improved since 2024. They support keeping rates where they are to combat inflation. Others, however, are more worried that hiring has nearly ground to a halt and have supported lowering borrowing costs to spur spending and growth.

November's job gain was revised slightly lower, from 64,000 to 56,000, while October's now shows a much steeper drop, with a loss of 173,000 positions, down from previous estimates of a 105,000 decline. The government revises the jobs figures as it receives more survey responses from businesses.

The economy has now lost an average of 22,000 jobs a month in the past three months, the government said. A year ago, in December 2024, it had gained 209,000 a month. Most of those losses reflect the purge of government workers by Elon Musk's Department of Government Efficiency.

Nearly all the jobs added in December were in the health care and restaurant and hotel industries. Health care added 38,500 jobs, while restaurants and hotels gained 47,000. Governments — mostly at the state and local level — added 13,000.

Manufacturing, construction and retail companies all shed jobs. Retailers cut 25,000 positions, a sign that holiday hiring has been weaker than previous years. Manufacturers have shed jobs every month since April, when Trump announced sweeping tariffs intended to boost manufacturing.

Wall Street and Washington are looking closely at Friday's report as it's the first clean reading on the labor market in three months. The government didn’t issue a report in October because of the six-week government shutdown, and November’s data was distorted by the closure, which lasted until Nov. 12.

The hiring slowdown reflects more than just a reluctance by companies to add jobs. With an aging population and a sharp drop in immigration, the economy doesn't need to create as many jobs as it has in the past to keep the unemployment rate steady. As a result, a gain of 50,000 jobs is not as clear a sign of weakness as it would have been in previous years.

And layoffs are still low, a sign firms aren't rapidly cutting jobs, as typically happens in a recession. The “low-hire, low-fire” job market does mean current workers have some job security, though those without jobs can have a tougher time.

Ernesto Castro, 44, has applied for hundreds of jobs since leaving his last in May. Yet the Los Angeles resident has gotten just three initial interviews, and only one follow-up, after which he heard nothing.

With nearly a decade of experience providing customer support for software companies, Castro expected to find a new job pretty quickly as he did in 2024.

“I should be in a good position,” Castro said. “It’s been awful.”

He worries that more companies are turning to artificial intelligence to help clients learn to use new software. He hears ads from tech companies that urge companies to slash workers that provide the kind of services he has in his previous jobs. His contacts in the industry say that employees are increasingly reluctant to switch jobs amid all the uncertainty, which leaves fewer open jobs for others.

He is now looking into starting his own software company, and is also exploring project management roles.

December’s report caps a year of sluggish hiring, particularly after April's “liberation day” tariff announcement by Trump. The economy generated an average of 111,000 jobs a month in the first three months of 2025. But that pace dropped to just 11,000 in the three months ended in August, before rebounding slightly to 22,000 in November.

Last year, the economy gained just 584,000 jobs, sharply lower than that more than 2 million added in 2024. It's the smallest annual gain since the COVID-19 pandemic decimated the job market in 2020.

Subdued hiring underscores a key conundrum surrounding the economy as it enters 2026: Growth has picked up to healthy levels, yet hiring has weakened noticeably and the unemployment rate has increased in the last four jobs reports.

Most economists expect hiring will accelerate this year as growth remains solid, and Trump's tax cut legislation is expected to produce large tax refunds this spring. Yet economists acknowledge there are other possibilities: Weak job gains could drag down future growth. Or the economy could keep expanding at a healthy clip, while automation and the spread of artificial intelligence reduces the need for more jobs.

Productivity, or output per hour worked, a measure of worker efficiency, has improved in the past three years and jumped nearly 5% in the July-September quarter. That means companies can produce more without adding jobs. Over time, it should also boost worker pay.

Even with such sluggish job gains, the economy has continued to expand, with growth reaching a 4.3% annual rate in last year's July-September quarter, the best in two years. Strong consumer spending helped drive the gain. The Federal Reserve Bank of Atlanta forecasts that growth could slow to a still-solid 2.7% in the final three months of last year.

FILE - A hiring sign is displayed at a grocery store in Northbrook, Ill., Tuesday, Jan. 21, 2025. (AP Photo/Nam Y. Huh)