Japan's Jobless Rate Falls to 4%

Japan's unemployment rate unexpectedly fell from a two-year high and job vacancies tumbled to a four-year low as job seekers stopped looking for work amid an economic slowdown.

The jobless rate fell to 4 percent last month from 4.2 percent in August, the statistics bureau said today in Tokyo. The median estimate of 39 economists surveyed by Bloomberg was for unemployment to be unchanged. Household spending fell 2.3 percent from a year earlier, the seventh straight decline.

Japan's largest companies including Sony Corp. and Canon Inc. said profits are deteriorating as a deepening credit crisis damps demand around the world. Squeezed profits may compel companies to fire workers and cut wages, weakening spending at home.

The number of people in the workforce shrank by 200,000 from August, today's report showed, causing a rebound in the jobless rate. The number of people employed fell by 110,000, the report said, the fourth drop in five months.

The ratio of jobs available to each applicant fell to 0.84, the lowest since August 2004, the Labor Ministry said. The government last week acknowledged Japan has probably entered its first recession in six years as exports, output and spending slow.

Sumco Corp., the world's second-largest maker of silicon wafers, said last week it is planning a ``significant'' cut in the number of temporary workers, after it forecast profit will fall to a three-year low in the period ending January.

Canon, the world's largest camera maker, reported its first profit decline in nine years last week. Sony, the second-largest maker of consumer electronics, reported that second-quarter profit fell 72 percent, citing the stronger yen and a slump in the value of stock holdings.

The yen rose to a 13-year high last week and the Nikkei 225 Stock Average lost more than 40 percent of its value this year.

The number of job advertisements fell 13.9 percent last month, according to the Association of Job Journals of Japan. The average hourly wage advertised fell 0.7 percent from a year earlier, Intelligence Ltd., a Tokyo-based recruiter, reported this week on its Web site.


TradingEconomics.com, Bloomberg.com
10/31/2008 9:09:27 AM