Japan’s Jobless Rate Rises to Five-Year High

Japan’s unemployment rate rose to a five-year high in May while household spending unexpectedly advanced as government handouts helped spur a recovery from the worst postwar recession.
TradingEconomics.com, Bloomberg 6/29/2009 9:53:44 PM

The jobless rate rose to 5.2 percent from 5 percent in April, the statistics bureau said today in Tokyo. Household spending rose 0.3 percent, the first gain in 15 months, a separate report showed. Economists expected outlays to fall 1.5 percent.

The world’s second-largest economy will probably expand for the first time in more than a year this quarter, boosted by Prime Minister Taro Aso’s stimulus measures.

The government has given cash handouts of at least 12,000 yen ($125) to each resident, as well as tax breaks for fuel- efficient cars and incentives for buying eco-friendly televisions, refrigerators and air conditioners. The measures have helped lift consumer confidence to a 14-month high. Sales of electronics are up 18 percent since the government introduced incentives to buy energy-efficient goods, according to Tokyo- based researcher Gfk Marketing Service Japan Ltd.

The increased spending hasn’t been enough to revive business at all retailers. Takashimaya Co., Japan’s third- largest department-store chain, began its summer sales 10 days earlier than usual in a bid to spur demand. The Osaka-based company is reducing part-time workers, Hirofumi Hisasue, a senior operating officer, said after the company reported a third straight quarterly profit decline last week.

Another key gauge of the labor market showed job prospects are the worst ever. The ratio of positions available to each applicant dropped to 0.44, the lowest since the survey began in 1963, the Labor Ministry said. Data yesterday showed retail sales dropped 2.8 percent in May from a year earlier, the ninth monthly decline.

Summer bonuses at Japan’s largest companies will slide a record 18.3 percent this year, according to a survey published last week by Keidanren, the country’s biggest business lobby. Panasonic Corp., the world’s largest maker of plasma televisions, last week said it will cut the annual salaries of its 10,000 managers this year.

Japan’s Jobless Rate Rises to Five-Year High