Japan’s Jobless Rate Rises to 3.9%; Household Spending Falls
Japan’s unemployment rate rose in November as plunging exports prompted companies to fire workers.
The jobless rate climbed to 3.9 percent from 3.7 percent in October, the statistics bureau said today in Tokyo. The median estimate of 34 economists surveyed by Bloomberg was for 4 percent. Household spending fell 0.5 percent from a year earlier.
Toyota Motor Corp., Sony Corp. and Canon Inc. announced staff cuts over the past two months in response to the sharpest- ever decline in exports. Economists say more jobs are on the line as the recession deepens, making it unlikely consumers at home will keep the economy afloat as demand from abroad falters.
“It’s hard to imagine employment reductions stopping at current levels,” said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. “An even worse employment environment lies ahead in 2009.”
Renesas Technology Corp., the world’s largest privately held chipmaker, yesterday said it plans to eliminate all 1,000 of its temporary staff by March 31. Sanyo Electric Co. said it will cut 460 temporary positions.
The ratio of jobs available to each applicant dropped for a 10th month to 0.76, extending the longest losing streak since 1998, the Labor Ministry said today, underscoring why consumer sentiment fell to a record low last month. Weaker personal spending, which accounts for more than half of the economy, is prompting some retailers to reconsider their investments pay day loans.
Louis Vuitton
LVMH Moet Hennessy Louis Vuitton SA last week scrapped plans to open a 12-story Tokyo store after it failed to reach an agreement with a developer amid slumping demand for luxury goods. Isetan Mitsukoshi Holdings Ltd., Japan’s largest department store, will delay renovating its two flagship outlets in Tokyo by as long as two years, broadcaster NHK reported last week.
The Nikkei 225 Stock Average is set for its worst year on record after losing 44 percent of its value. The government expects no economic growth in the year starting April 1.
Prime Minister Taro Aso, who is facing plunging approval ratings, this month introduced his second stimulus package since becoming Japan’s leader in September. The plan includes making more people eligible for unemployment benefits and helping fired workers obtain cheap housing.
Companies reported that they have too many employees for the first time since 2005, the central bank’s quarterly Tankan business survey showed last week. Toyota expects its first operating loss in 71 years and plans to cut 3,000 jobs.
“The environment we’re in is extremely tough,” Toyota President Katsuaki Watanabe said this week. “We’re facing an unprecedented emergency situation. Unfortunately, we can’t see the bottom.”
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