Japan’s Jobless Rate Surges to 4.4%; Household Cut Spending

By Toru Fujioka

Jan. 30 (Bloomberg) -- Japan’s unemployment rate rose in December as plunging exports prompted companies to cut output and workers, indicating consumer spending will weaken further.

The jobless rate climbed to 4.4 percent from 3.9 percent in November, the statistics bureau said today in Tokyo. The median estimate of 35 economists surveyed by Bloomberg was for 4.1 percent. Household spending fell 4.6 percent from a year earlier.

Manufacturers from Sony Corp. to Toyota Motor Corp. are reducing production and firing workers as exports drop at a record pace. The manufacturing slump could lead to “significant” job losses, the government said this month.

“We’re going to see further deterioration in the labor market,” said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. “More companies will realize they need to fire workers and that will weaken consumer spending and deepen the recession.”

The ratio of jobs available to each applicant dropped for a 11th month to 0.72, the lowest since November 2003, the Labor Ministry said today.

Some 400,000 non-regular workers will be out of jobs by the end of March, the Japan Manufacturing Outsourcing Association reported this week, which was about five times more than a December estimate by the Labor Ministry.

“This deep recession could compel companies to cut full- time workers,” said Noriaki Matsuoka, an economist at Daiwa Asset Management Co. in Tokyo. “The jobless rate could rise to around 5 percent, giving us more reasons not to expect consumer spending to support the economy.”

Yokogawa Electric Corp. proposed to its labor union that the 6,000 workers take a furlough for an average of three days a month by the end of June, company spokesman Koichi Uemura said this week.

The number of job advertisements fell 28.7 percent last month, the steepest decline since November 1992, according to the Association of Job Journals of Japan. The ratio of university graduates who have found a job dropped for the first time in five years to 80.5 percent, the Labor Ministry said.

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net