Japan unemployment rate at record high, spending falls<\/p>\n
Tamawa Kadoya, Reuters<\/p>\n
Japan's unemployment rate climbed to a record high for the
\nfourth straight month in December and household spending sagged,
\nproviding little hope that the world's second-largest economy
\nwill pull out of recession any time soon.<\/p>\n
Industrial output gained for the first time in four months,
\nbut government officials were quick to play down any notion that
\nthis might be the start of a convincing recovery.<\/p>\n
Japan's jobless rate rose to 5.6 percent in December, up from
\n5.5 percent in November, according to the Ministry of Public
\nManagement, Home Affairs, Posts and Telecommunications.<\/p>\n
It was the highest rate since unemployment records began in
\ntheir current form in 1953.<\/p>\n
Separate data showed that average spending by households with
\nwage-earners fell sharply, down a real 4.4 percent in December
\nfrom a year earlier, the first decline in three months.<\/p>\n
The politically sensitive unemployment rate rose as recession
\nand tough competition forced companies to shed more workers.<\/p>\n
Prime Minister Junichiro Koizumi has come under pressure from
\nwithin his party to increase government spending to boost the
\neconomy, but has stuck to his line that structural reform is
\nneeded for long-term growth, even if that brings short-term pain.<\/p>\n
Finance Minister Masajuro Shiokawa said the jobless rate would
\nprobably stay at high levels.<\/p>\n
\"This will probably continue,\" he told a news conference.
\n\"Businesses have just started to restructure.\"<\/p>\n
To cope with the deteriorating economy, the government has
\ncompiled a 2.64 trillion yen (US$19.77 billion) extra budget that
\nis expected to pass the Lower House later on Tuesday.<\/p>\n
The passage of the budget bill was supposed to have taken
\nplace on Monday but was delayed after opposition lawmakers walked
\nout in protest at a feud between Foreign Minister Makiko Tanaka
\nand ministry officials.<\/p>\n
It is the second supplementary spending package for the
\ncurrent fiscal year ending in March.<\/p>\n
Rising unemployment has cast a shadow over hopes of a pick-up
\nin personal consumption. Consumption accounts for about 60
\npercent of Japan's gross domestic product (GDP).<\/p>\n
GDP is expected to contract by about one percent in the
\ncurrent fiscal year ending in March and the government is
\nofficially forecasting zero growth the following year.<\/p>\n
\"We cannot be complacent about the economy,\" said Trade
\nMinister Takeo Hiranuma. \"There is a serious risk of an economic
\ndownturn if the U.S. economic recovery undercuts expectations.\"<\/p>\n
Separate data released by the Ministry of Health, Labor and
\nWelfare showed the seasonally adjusted jobs-to-applicants ratio
\nwas 0.51 in December, meaning there were just 51 openings for
\nevery 100 job seekers. This was down from 0.53 in November.<\/p>\n
Data released on Monday showed Japanese consumers reduced
\ntheir retail spending for a ninth consecutive month in December.<\/p>\n
The Ministry of Economy, Trade and Industry (METI) said
\nindustrial output rose 2.1 percent in December from a month
\nearlier on a seasonally adjusted basis.<\/p>\n
That was better than a median forecast of a 1.5 percent gain
\nin a Reuters survey of 15 economists conducted last week.<\/p>\n
Despite the rise, METI kept its assessment of industrial
\noutput unchanged, saying it remained on a declining trend.<\/p>\n
Economists cautioned against reading too much into the output
\nfigures as improvements were narrowly based, largely concentrated
\nin the high-tech sector.<\/p>\n
Output for electrical machinery gained in December for the
\nfirst time in a year, rising 3.5 percent from the previous month.<\/p>\n
\"It looks like output is bottoming out but it is not very
\nbroad-based and could be just a temporary bottom,\" said Yasuaki
\nKudamatsu, senior economist at Tsubasa Research Institute.<\/p>\n
For October-December, output fell 2.3 percent from July-
\nSeptember, down for the fourth straight quarter.<\/p>\n
\"I think the yen has helped as well. This is still a short-
\nterm movement, however, and we need more time to see if we've hit
\nbottom,\" said Tsuyoshi Segawa, equity strategist at Shinko
\nSecurities.<\/p>",
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