business

Japan's jobless rate dips to 5.5% in August

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Japan's unemployment rate fell to 5.5% in August after reaching a record high a month earlier, the government said Friday.

The jobless rate in the world's No. 2 economy hit 5.7% in July, the highest level in the country's post-World War II era amid mounting job and wage cuts. Analysts had been predicting the figure would continue climbing.

In a separate report, the Ministry of Internal Affairs and Communications said household spending rose 2.6% from a year earlier despite a 2% drop in average monthly income.

The unexpected results are a welcome development for Japan as it emerges from its worst recession since World War II. But with an uncertain profit outlook, companies remain wary of investing in factories or workers -- a deep wrinkle that could undermine the country's nascent rebound.

The overall labor market is still weak, with the total number of jobless in August rising 32.7% from a year earlier to 3.61 million, the ministry said. Those with employment fell 1.7% to 62.96 million.

The ratio of job offers to job seekers in August matched last month's record low of 0.42, the labor ministry said separately. That means there were 42 jobs available for every 100 job seekers.

The central bank's quarterly "tankan" survey of business sentiment released Thursday showed that while companies are more confident than three months ago, they say they still have too many workers and too much capacity.

Major manufacturers and non-manufacturers plan to reduce their capital expenditures by an average 10.8% this fiscal year through March 2010.

"It doesn't help so much that companies are becoming a bit more optimistic," said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. "What they need to see is that we really have original new domestic demand. And this is simply not happening."

The Nikkei financial daily reported this week that major retailer Seven & i Holdings Co is considering shuttering 30 Ito-Yokado Co supermarkets nationwide in an effort to stem losses. And Japan Airlines said last month it plans to cut 6,800 jots by March 2012.

Japan's heavy reliance on exports, which drove economic expansion for five years through 2007, backfired in the aftermath of last year's global financial crisis. Between the third quarter of 2008 and the first quarter of 2009, Japanese exports plunged by the steepest margin among the Organization for Economic Cooperation and Development's 30 member countries.

The downturn resulted in a deep recession, which Japan finally managed to shake off in the April-June quarter. Aggressive emergency spending by governments, particularly China, has helped boost export demand and factory output.

Government data this week showed that industrial output in August increased 1.8% from the previous month.

The persistent caution among companies, however, doesn't bode well for private spending in the months ahead.

Concerns about deflation are also intensifying after prices in Japan tumbled at a record pace in August. Lower prices may seem like a good thing, but deflation can hamper growth by depressing company profits and causing consumers to postpone purchases, leading to production and wage cuts. It can also increase debt burdens.

© Wire reports

©2019 GPlusMedia Inc.

11 Comments
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While this is welcome news, part of me wonders if this happened because people got hired or if they're simply dying off or no longer counted. Unemployment in Japan for some people is a death sentence. Fortunately, the newer generation will be more flexible as business adapts and so do they.

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Article needs to give out more information.

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Government can not provide job for Japanese and other people in japan then why they send ODA to other country sucn lot of moeny where it is not necessary.Just to win seat in UN?

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that we really have original new domestic demand

This hasnt happened for the better part of two decades, why should it happen now?

Analysts had been predicting the figure would continue climbing.

Do analysts consider that many have given up looking for work?

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These are weekly rates. The monthly rates are too bad to print.

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In last 8 years many call-center, IT and financial research jobs outsourced to cheap labor countries from Japan. Nowadays, Japanese city garbage poly bag is even not ‘Made in Japan’.

It is foolish to send jobs (including insurance and financial data entry) to cheap labor countries in name of 'cost cutting'.

This is not a right way to achieve globalization target. Provide proper education and technical guidance to all cheap labor countries so they can solve their own problems (including global warming). Do not outsource for your greed and do not create a new kind of global economic imbalances.

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Lies Lies Lies: If they counted those who've quit looking for work as well as Uni grads who are working at Family Marto the true number would be 10%-12% and that might even be conservative. The US number is always too low as well but closer to reality than Japans.

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kaminarikeizai: I am 100% in agreement with you thinking. Companies have offshored jobs just to fatten the CEO's bank account. This can't continue or the 1st world countries will be 3rd world countries in no time.

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Government can not provide job for Japanese and other people in japan then why they send ODA to other country

Surely you don't believe ODA is for benefiting the other countries? Its for subsidizing the japanese heavy-industry and construction business. Bids for ODA projects are restricted only to japanese companies.

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Provide proper education and technical guidance to all cheap labor countries so they can solve their own problems (including global warming). Do not outsource for your greed and do not create a new kind of global economic imbalances.

Wasn't Japan in the same show after the war? No capital, no infrasture, and no economy. One day these countries will move up the economic ladder and create markets for Japan goods. This is economics 101.

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Yes, Japan was in the same show after the war.

In the current business practice, unplanned outsourcing is the biggest threat and danger for the society. We can see global economic imbalances everywhere. Rich nations and poor nations both will suffer this outsourcing in the future.

If countries do not have manpower or other resources, can go for outsourcing and it is the best option for the society. But it is danger to neglect your own resources and manpower, start to outsource a cheap labor country in name of cost-cut, blindly import cheap products or sending backend work to overseas. After using a cheap labor country for some years, move to other cheap labor country, so on………, just for the sake of greed. I do not like such kind of globalization.

Japanese companies never hire a person who changed job more than 2 times. I could not understand why these greedy companies are moving their business from one nation to another nation to make a cheap product. 

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