Japan's Unemployment Rate Falls to 4%

Japan's unemployment rate stayed near the highest level since 2006 and job prospects worsened, signaling consumers are unlikely to bolster an economy that shrank last quarter.

The jobless rate fell to 4 percent in July, the statistics bureau said today in Tokyo. The ratio of jobs available to each applicant fell for a sixth month to 0.89, the lowest since October 2004, the Labor Ministry said.

The Bank of Japan said the world's second-largest economy is ``sluggish'' for the first time in 10 years after it contracted at an annual 2.4 percent pace in the second quarter. Costlier fuel and materials and a funding squeeze for real- estate companies caused bankruptcies to rise to the highest in three years in July, Teikoku Databank Ltd. said this month.

Household spending fell 0.5 percent in July from a year earlier, the fifth monthly decline, the statistics bureau said today. The median forecast of 34 economists surveyed by Bloomberg News was for a 1.8 percent drop.

Even Japan's biggest companies are laying off staff to cut costs as surging material prices erode profits and the global slowdown weakens exports. Since June, Toyota Motor Corp. has fired 800 workers at a Kyushu-based subsidiary that's making fewer sport-utility vehicles and Lexus sedans bound for the U.S.


TradingEconomics.com, Bloomberg
8/28/2008 7:13:49 PM