Japan's Jobless Rate Rises to 4.2%

Japan's unemployment rate rose to 4.2 percent in August, the highest in two years, and households cut spending, signaling consumers are unlikely to support the faltering economy.

The jobless rate climbed from 4 percent in July, the statistics bureau said today in Tokyo. Household spending fell 4 percent from a year earlier, the sixth straight decline, the bureau said.

Weakening demand at home and abroad has prompted some economists to say the world's second-largest economy is already in a recession. Sentiment among large manufacturers fell to a five-year low this month, a central bank survey is expected to show tomorrow, worsening prospects for wages and hiring.

The ratio of jobs available to each applicant fell for a seventh month to 0.86, the lowest since September 2004, the Labor Ministry said today. Consumer prices excluding fresh food climbed 2.4 percent in August, matching July's increase as the fastest since October 1997, and household confidence slumped to a record low. Wages grew the least this year in July.

The number of job advertisements fell 14 percent last month, according to the Association of Job Journals of Japan. The average hourly wage advertised fell 0.9 percent from a year earlier, Intelligence reported yesterday on its Web site.

Rising bankruptcies are also putting people out of work. Companies that went out of business in August had a total of 13,704 employees, the most since February 2004 and 43 percent more than bankrupted firms a year ago, according to Tokyo Shoko Research Ltd. At least 60 percent of those workers will lose their jobs, the researcher said.


TradingEconomics.com, Bloomberg.com
9/29/2008 5:35:37 PM