Friday October 30, 03:21 AM
Japan's jobless rate drops to four-month low
By Miwa Suzuki
TOKYO (AFP) - Japan's economy on Friday showed fresh signs that it is recovering after a sharp downturn, with the jobless rate hitting a four-month low, deflation easing and household spending edging up.
The unemployment rate fell to 5.3 percent in September, the government reported, beating market expectations for an increase to 5.6 percent.
The latest figure, down from 5.5 percent in August and the lowest since 5.2 percent in May, was "a good sign" for the economy, said Hiroshi Watanabe, an economist at Daiwa Institute of Research.
"Companies still have a potential excess of workers but the jobless rate does not seem likely to worsen rapidly, he said.
A separate survey released by the labour ministry Friday showed there were 43 job offers for every 100 jobseekers in September, slightly up from a record low of 42 in the previous two months.
It is the first time since May 2007 that the job-offer ratio has improved from the previous month.
Household spending meanwhile gained 1.0 percent in September from a year earlier, increasing for a second consecutive month.
Many Japanese companies, particularly exporters, moved swiftly to cut jobs and production in response to a slump in demand caused by the global economic downturn.
But Japan's economy grew in April-June for the first time in five quarters on rebounding exports and government stimulus measures.
Watanabe said the current economic recovery was "largely supported" by the government's subsidies for environmentally friendly cars and consumer electronics, as well as incentives for companies to keep workers.
"Japan's exports and recovering industrial production were also boosted by government stimulus packages abroad. The economic recovery is not self-supportive and is still weak," he said.
Deflation in Japan eased slightly in September following four straight months of record declines in consumer prices.
Core (Berlin: LJ1.BE - news) prices, which exclude those of volatile fresh food, dropped 2.3 percent in the month from a year earlier, after an unprecedented 2.4 percent slump in August, official data showed.
Compared with the previous month, prices rose 0.1 percent -- the first increase in six months.
Even so, some economists warned against being too upbeat about the economic outlook.
"There are concerns that price drops in services and other wide-ranging sectors may pressure wages, leading consumers to seek even lower prices," Credit Suisse economists wrote in a report.
"A further credit easing is needed" as deflation remains, they said. The Bank of Japan was due to release a report on the economic outlook later Friday.
Japan was stuck in a deflationary spiral for years after its asset price bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of further price drops.
The current global economic downturn and a slump in commodity costs pushed the world's number two economy back into the deflationary doldrums. Core consumer prices have now fallen year-on-year for the past seven months.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
