Tomoko A. Hosaka
Japan unemployment rises to 5.2 percent in May
TOKYO — Japanese companies may be starting to boost production, but they certainly aren’t hiring yet.
The country’s unemployment rate rose to 5.2 percent in May, the highest in five and a half years, the government said Tuesday. The figure, in line with forecasts, worsened from 5.0 percent in April.
The swelling number of unemployed Japanese could delay a broad-based recovery for the world’s second-largest economy even as manufacturers enjoy a nascent rebound, economists say.
Despite the jobless now totaling nearly 3.5 million, household spending unexpectedly logged its first gain since January 2008, boosted by Prime Minister Taro Aso’s multibillion dollar stimulus measures.
Average monthly household spending — a key indicator of private consumption — edged up 0.3 percent in May from a year earlier, the government said. Aso’s “eco-points” program encouraged sales of some energy-efficient electronics, while recent swine flu fears compelled consumers to buy more healthcare products.
Economists, however, say the improvement may be fleeting.
“Spending is likely to fall back toward the end of the fiscal year when policy impact fades given labor market deterioration and wage decline,” said Chiwoong Lee, an economist at Goldman Sachs in Tokyo.
The total number of jobless people climbed by 770,000 from a year earlier to 3.47 million in May, according to the Ministry of Internal Affairs and Communications in its monthly report. Those with employment fell by 1.36 million from the previous year to 63.42 million.
A separate report by the labor ministry underscored the dreary jobs environment.
The ratio of job offers to job seekers hit 0.44 — the lowest on record. The figure indicates that there were 44 positions available for every 100 job seekers.
The “income and employment environment surrounding households is turning increasingly severe despite some improvements in the manufacturing sector,” said Kyohei Morita, chief economist at Barclays Capital in Japan, in a note to clients.
Morita expects both the unemployment rate and jobs-applicants ratio to climb to record levels by the end of the year.
Japan’s worst jobless rate is 5.5 percent, last hit in April 2003.
Like its Asian neighbors, Japan’s economy relies heavily on exports and has been pummeled by the unprecedented drop in global demand triggered last year by the financial crisis. The country’s biggest corporate names, including Toyota Motor Corp. and Sony Corp., responded by aggressively cutting production, stockpiles and jobs.
Leaner manufacturers are now working on replenishing inventories to meet an uptick in overseas demand. Massive government stimulus spending around the world, particularly in China, is helping fuel sales of cars, equipment and machinery.
Government data Monday showed that industrial output increased 5.9 percent from the previous month, matching a rise in April that marked the biggest jump since March 1953.
While aggressive cost cutting may have benefited companies, it continues to take a toll on workers and families. Retail sales fell 2.8 percent in May year-on-year, extending a losing streak to nine months, the government said Monday.
Prices are also dropping in the face of weak domestic demand, a troubling trend that threatens to hamper an economic recovery. Last week the government said Japan’s key consumer price index tumbled at a record pace in May.
Among other key indicators this week, the Bank of Japan will release its closely watched “tankan” survey of corporate sentiment on Wednesday.
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