Japan's Unemployment Rate Unexpectedly Rises for Second Month

Japan's unemployment rate unexpectedly rose for a second month and the Labor Ministry downgraded its assessment of the jobs market as hiring slowed.

The unemployment rate climbed to 4 percent in September from 3.8 percent last month and 3.6 percent in July, the statistics bureau said today in Tokyo. The improvement in the jobs market ``has weakened in recent months,'' the Labor Ministry said, adding the phrase to its monthly description.

The Bank of Japan expects demand for workers to drive up pay, fueling an expansion in consumer spending, which accounts for more than half of the economy. A deterioration in the job market may undermine the bank's case the economy is robust enough to withstand an increase in its key interest rate.

The number of jobs available for each applicant slipped for a third month to 1.05 in September from 1.06 in the previous month, the Labor Ministry said today.

Hiring Pace Slows

The pace of hiring slowed in September. The number of people employed increased by 130,000 last month compared with 590,000 in August, the bureau said. Staff at companies with fewer than 30 employees fell by 2.1 percent, the first drop in four months.

Wages fell in the first seven months of this year and dropped 10 percent in the past decade. The end of tax breaks in June and higher prices of gas and staples such as bread and instant noodles have eroded disposable income and damped sentiment, which is near a three-year low.


10/29/2007 7:23:34 PM