Japan's Jobless Rate Rises to 4.0%

Japan's job vacancies fell to a three-year low in April and the unemployment rate rose as higher energy costs eroded profits and discouraged hiring.

The jobless rate rose to 4.0 percent from 3.8 percent in March, the highest since September, the statistics bureau said today in Tokyo. The ratio of jobs available to each applicant, a leading indicator of the job market, fell to 0.93 last month from 0.95, the lowest since March 2005, the Labor Ministry said.

Companies are becoming reluctant to hire workers and raise wages as record oil prices and costlier raw materials eat into profits. Household spending fell the most in 19 months and may undermine economic growth just as exports are weakening.

Household spending dropped 2.7 percent in April, the biggest drop in 19 months, a separate report showed today. Consumer confidence is at a six-year low. Core consumer prices rose 0.9 percent in April from a year earlier after surging 1.2 percent in March, the fastest rate in a decade.

The economy expanded at an annual 3.3 percent pace in the first quarter, driven by exports and consumer spending. Economists at Credit Suisse Group say the economy may contract this quarter. Industrial production fell 0.3 percent last month, after falling at the fastest pace in five years in March.

Sluggish profits are prompting companies to fire workers to save costs. Pioneer Corp., Japan's third-biggest plasma- television maker, will cut 300 jobs after forecasting its fifth straight annual loss this year, the company said this month.


TradingEconomics.com, Bloomberg
6/7/2008 3:34:05 PM