Japan's jobless rate hits near two-year high
Japan said on Tuesday its unemployment rate hit a near two-year high in June while consumer spending declined, raising concerns that the worsening business climate is hurting the overall economy.
By Agencies |
TOKYO: Japan said on Tuesday its unemployment rate hit a near two-year high in June while consumer spending declined, raising concerns that the worsening business climate is hurting the overall economy.
Soaring energy and raw material costs are making companies more cautious about hiring workers, which could have a negative knock-on effect on consumption and economic growth, analysts said.
The jobless rate hit 4.1 per cent in June, the highest since September 2006, the Ministry of Internal Affairs and Communications reported. Markets had expected the jobless rate to remain unchanged at 4.0 per cent.
The jobless total rose 240,000 from a year earlier to 2.65 million people. The weak jobs data "reflect the economic lull," Economic and Fiscal Policy Minister Hiroko Ota told reporters, adding that the government would closely watch developments in the labour market.
Meanwhile, household spending slipped 1.8 per cent in June from a year earlier, falling for a fourth straight month, the government reported. Household income dropped 2.1 per cent on average.
Japan's economy is gradually recovering from recession in the 1990s but companies are being pressured by a stronger yen, soaring raw material costs and a US economic slowdown.
"It seems like surging oil and raw materials prices are weighing on corporate profits, so the job market is not in a very good condition," said Daiwa Securities economist Masahiko Hashimoto.
"Japan's economy is definitely slowing but whether it stays on a recovery path in the longer term or heads toward recession depends on the future trend of commodity prices and the prospects of the US and world economy," he said.
There were 91 job offers for every 100 job applicants in June, slightly less than the previous month, a separate report from the labour ministry showed. The number of new job offers fell 17.9 per cent in June from a year earlier.
The jobless rate for men held steady at 4.2 per cent while for women it rose to 4.0 per cent from 3.7 per cent.
The Bank of Japan's quarterly business confidence survey earlier this month showed that big manufacturers are at their most pessimistic in almost five years due to soaring costs, a slowing global economy and a stronger yen.
Soaring energy and raw material costs are making companies more cautious about hiring workers, which could have a negative knock-on effect on consumption and economic growth, analysts said.
The jobless rate hit 4.1 per cent in June, the highest since September 2006, the Ministry of Internal Affairs and Communications reported. Markets had expected the jobless rate to remain unchanged at 4.0 per cent.
The jobless total rose 240,000 from a year earlier to 2.65 million people. The weak jobs data "reflect the economic lull," Economic and Fiscal Policy Minister Hiroko Ota told reporters, adding that the government would closely watch developments in the labour market.
Meanwhile, household spending slipped 1.8 per cent in June from a year earlier, falling for a fourth straight month, the government reported. Household income dropped 2.1 per cent on average.
Japan's economy is gradually recovering from recession in the 1990s but companies are being pressured by a stronger yen, soaring raw material costs and a US economic slowdown.
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"It seems like surging oil and raw materials prices are weighing on corporate profits, so the job market is not in a very good condition," said Daiwa Securities economist Masahiko Hashimoto.
"Japan's economy is definitely slowing but whether it stays on a recovery path in the longer term or heads toward recession depends on the future trend of commodity prices and the prospects of the US and world economy," he said.
There were 91 job offers for every 100 job applicants in June, slightly less than the previous month, a separate report from the labour ministry showed. The number of new job offers fell 17.9 per cent in June from a year earlier.
The jobless rate for men held steady at 4.2 per cent while for women it rose to 4.0 per cent from 3.7 per cent.
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Japan's economy expanded at a brisk 4.0 per cent annualised pace in the first quarter of 2008 despite weak US growth and high oil prices, but domestic demand now appears to be cooling while the global economic climate is worsening. The Bank of Japan's quarterly business confidence survey earlier this month showed that big manufacturers are at their most pessimistic in almost five years due to soaring costs, a slowing global economy and a stronger yen.
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Analysts do not expect the Bank of Japan (BoJ) to raise its super-low interest rates from the current level of 0.5 per cent any time soon given the fragile health of the economy, despite the fastest inflation in a decade. Download
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