Japan's Jobless Rate Holds at 3.8%

Japan's unemployment rate was unchanged in December and a key gauge of job vacancies fell to a two-year low, adding to evidence that consumer spending may slow.
TradingEconomics.com, Bloomberg 1/28/2008 7:02:42 PM

The jobless rate stayed at 3.8 percent last month, the statistics bureau said today in Tokyo. The number of positions available for each applicant fell to 0.98. Record gasoline prices helped retail sales rise 0.2 percent from a year earlier.

Consumers, who are the most pessimistic they've been in four years, face falling wages, the fastest inflation rate in almost a decade, and a stock market that's plunged 13 percent this month. The world's second-largest economy may already be in a recession, Goldman Sachs Group Inc. said yesterday.

Japan's economic growth is likely to peak this fiscal year, Eisuke Sakakibara, former top currency official at the Ministry of Finance, said today in an interview with Bloomberg Television.

Economists expect growth to cool as a slump in U.S. demand causes exports, the main engine of the expansion in the third quarter, to lose steam. Shipments overseas rose at the slowest pace since 2005 in the fourth quarter.

Retail sales fell for the first time in five years in 2007, as consumers bought fewer cars and unfavorable weather affected purchases of seasonal items, Trade Ministry spokesman Takahide Arai said today.

Job seekers outnumbered positions available for a second month, with the ratio falling to the lowest level since October 2005, the Labor Ministry's report showed.

Household sentiment fell in December to the lowest level since June 2003. A central bank survey this month showed 55 percent of consumers plan to cut spending this year. Wages slid in all but two of the first 11 months of 2007, while higher costs of gasoline and food caused consumer prices to surge 0.8 percent in December, the fastest pace since March 1998.

The unemployment rate fell for a fifth year to 3.9 percent in 2007 from 4.1 percent in 2006, today's report showed. That's the first time the jobless rate was below 4 percent in a calendar year since 1997.