Japan’s Jobless Rate Soars

Japan’s unemployment rate surged to a four-year high in March indicating any recovery in the world’s second-largest economy is likely to be weak.
TradingEconomics.com, Bloomberg 5/1/2009 7:21:38 AM

The jobless rate rose to 4.8 percent from 4.4 percent in February, the biggest jump since 1967, the government statistics bureau said in Tokyo today.

Household spending fell for a record 13th month as exporters from Pioneer Corp. to Toyota Motor Corp. cut jobs and wages to offset plunging profit. Japan’s economy may resume growing this quarter as production and exports stabilize following unprecedented declines, though the prospect of a return to deflation risks thwarting a sustained expansion.

Job prospects are getting worse and wage declines are accelerating, damping consumption, reports showed today.

The ratio of positions available to each applicant dropped to 0.52 from 0.59, the lowest in seven years, the Labor Ministry said. Wages plunged 3.7 percent, the fastest drop in more than six years, as companies slashed overtime pay at a record pace to cope with the collapse in exports.

Spending by households slid 0.4 percent, capping off the worst losing streak since comparable data were first made available in 1964.

The number of cases of employees who lost their jobs because they were fired or a project ended totaled 5.5 million since September, the statistics bureau said.

During Japan’s last bout with sustained price declines that began a decade ago, bankruptcies surged and the jobless rate advanced to a record 5.4 percent. Consumers delayed purchases, prompting companies to lower prices further, eroding profits and forcing them to cut wages.

Japan’s Jobless Rate Soars