Japan’s Unemployment Rate Falls to 5.3%

Japan’s jobless rate unexpectedly dropped to a four-month low in September, adding to signs that a recovery in the world’s second-largest economy is spreading to consumers.

The unemployment rate declined to 5.3 percent from 5.5 percent in August, the statistics bureau said.

The economy added jobs for a second month on a seasonally adjusted basis, today’s report showed. Manufacturers also cut jobs at a slower pace, according to year-on-year breakdowns provided by the government.

A separate report showed the job-to-applicant ratio, a leading indicator of employment trends, improved for the first time in more than two years. The ratio rose to 0.43 last month from a record low of 0.42 in August, meaning there are 43 jobs for 100 job seekers.

Manufacturers increased production for a seventh month in September, extending the longest stretch of gains in 12 years, a report showed. Honda, Japan’s second-largest carmaker, almost tripled its full-year profit forecast as government stimulus measures boosted demand, the company said this week.

Japan’s largest overseas markets are showing signs of picking up. The U.S. economy expanded at an annual 3.5 percent rate last quarter after a year long contraction and growth in China accelerated to 8.9 percent, the fastest pace in a year.

Still, signs that demand is rebounding hasn’t spurred hiring at all companies. Nomura Holdings Inc., Mitsubishi UFJ Financial Group Inc. and their biggest rivals plan to cut recruitment of university graduates in Japan by almost half, according to the companies.

Shinke said a government program providing wages subsidies is also supporting the job market. He said firms have applied for aid on behalf of about 2 million workers.

Deflation is also weighing on wages, which may compel consumers to cut spending in coming months. Core consumer prices, which exclude fresh food, tumbled 2.3 percent from a year earlier, the statistics bureau said.

Japan’s Unemployment Rate Falls to 5.3%

TradingEconomics.com, Bloomberg
10/29/2009 10:39:31 PM