Japan Jobless Rate Hits Record

Japan’s unemployment rate rose to a record 5.7 percent in July and deflation worsened, dealing a blow to Prime Minister Taro Aso on the eve of an election that polls indicate his ruling Liberal Democratic Party will lose.

The jobless rate surpassed the previous worst of 5.5 percent last seen in April 2003, the statistics bureau said in Tokyo.

Companies from Toyota Motor Corp. to Japan Airlines Co. are scaling back and cutting jobs as sales weaken at home and abroad. Exports fell 36.5 percent in July, a tenth monthly drop, as demand from all of the nation’s major markets deteriorated.

The unemployment rate is the highest since the government began collecting the data in 1953, a year after the U.S. military occupation ended. The LDP has governed Japan for all but 10 months since 1955.

The jobs-to-applicants ratio, a leading indicator of employment trends, fell to a record 0.42 in July, meaning there are only 42 positions for every 100 candidates, the Labor Ministry said today. The unemployment rate will reach 5.9 percent next year, according to economists Bloomberg surveyed.

The number of unemployed rose by 200,000 from June, the biggest increase since March, today’s report showed.

Toyota, Japan’s biggest automaker, said this week that it will shut down a domestic assembly line as sales plunge. Japan Airlines, Asia’s largest carrier by sales, may cut 5,000 jobs in three years, Kyodo News reported. Isetan Mitsukoshi Holdings Ltd., Japan’s largest department store chain, plans to eliminate 1,000 jobs by March, Nikkei English News said.

Japan Jobless Rate Hits Record

TradingEconomics.com, Bloomberg
8/27/2009 11:34:26 PM