Japan jobless rate hits 6-year high

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US new jobless claims swell to 627K

(Agencies)
Updated: 2009-07-31 10:23

TOKYO: Japan's unemployment rate rose to a six-year high and prices fell at a record pace in June, the government said Friday.

The jobless rate in the world's second-biggest economy worsened to 5.4 percent from 5.2 percent in May, suggesting that an emerging recovery for companies has yet to filter down to workers and families.

A factory is seen at a industrial complex in Kawasaki, near Tokyo July 30, 2009. [Agencies]

The unemployment rate last reached 5.4 percent in June 2003 after hitting a record 5.5 percent a month earlier.

The total number of jobless in June jumped 31 percent from a year earlier to 3.48 million, according to the Ministry of Internal Affairs and Communications. Those with employment fell 2.3 percent to 63 million.

The labor ministry released more sobering news in a separate report Friday.

The ratio of job offers to job seekers in June fell to a record 0.43. That means there were 43 jobs available for every 100 job seekers.

The specter of deflation intensified amid the persistent worries about jobs and wages.

Japan's key consumer price index fell a record 1.7 percent in June from a year earlier, the government said.

The nationwide core CPI, which excludes volatile fresh food prices, has dropped for four straight months. It is the steepest fall since the officials began compiling comparable data in 1971.

The core CPI for Tokyo dropped 1.7 percent in July, suggesting that prices nationwide are headed further south. Prices in the nation's capital are considered a leading barometer of price trends across Japan.

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.

Average monthly household income fell 3.2 percent in June from last year to 700,239 yen ($7,300). Still, household spending managed to edge up 0.2 percent, due in part to higher housing, transportation and health care costs.