Japanese unemployment rate dips

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Posted 8:34AM on Friday, March 1, 2002

TOKYO - Japan's unemployment rate stood at 5.3 percent in January, falling unexpectedly for the first time in 11 months, but government officials warned Friday that job problems remained serious. Jobs have been dwindling steadily in Japan, as its teetering economy battles its third recession in a decade. Manufacturing and construction sectors - the industries behind this nation's growth for decades - are persistently shedding jobs, the government said. The 0.2 percentage point improvement in the jobless rate from a record high 5.5 percent was largely a reflection of how bad conditions were in December, said Masato Chino, director of the government's labor statistics office. ``The trend has not changed,'' Chino said. ``The rate remains high.'' The last time Japan's unemployment rate dropped was in February last year when it stood at 4.7 percent, down from 4.8 percent the previous month. With no hope for recovery in sight, companies are likely to be forced to cut more jobs in coming months. On Thursday, major Japanese electronics maker Hitachi, which is expecting to lose 480 billion yen ($3.6 billion) this fiscal year, said it will cut 5,000 more jobs than announced last fall, slashing 20,930 jobs, or about 6 percent of its global work force, by June. According to the latest revised government figures, Japan's unemployment rate was 5.4 percent in November and 5.3 percent in October. For men, the January unemployment rate stood at 5.4 percent, down 0.4 percent from the previous month. The jobless rate for women was unchanged at 5.1 percent. The number of unemployed people totaled 3.44 million, up 270,000 from the same month a year ago. The U.S. unemployment rate for January stood at 5.6 percent for January. Unemployment in the 12 euro-zone countries for December was higher at 8.5 percent. Japanese Prime Minister Junichiro Koizumi has promised reforms, such as cleaning up the bad debts at the nation's banks, estimated by the government at 36 trillion yen ($269 billion). But progress has been slow. Earlier this week, Koizumi's administration announced a package to fight the threat of deflation - or a continuous dive in prices that can further diminish an economy's health by pushing down profits, income and the value of collateral on debts. But the announcement served more to highlight the muddling of the political leadership than offer any quick relief for the economy. Short on action, the program was more a rehash of old goals such as beefing up the monitoring of banks. Japan's leading business daily, the Nihon Keizai Shimbun, compared it to ``pouring water in a leaking bucket.'' The economy may start a gradual recovery by the summer on the back of the recent upturn in the United States, said Junichi Makino, economist at Daiwa Institute of Research in Tokyo. The U.S. government reported Thursday the economy grew in the fourth quarter at an annual rate of 1.4 percent, its fastest pace in a year. Exports, particularly to the United States, are a key engine of growth for Japan, the world's second largest economy. The recent fall in the yen is also an advantage, boosting the value of companies' overseas earnings. ``There's a time lag before such changes show up in employment data,'' Makino said. ``Even if there seems to be some hope, job conditions aren't going to immediately get better.'' Chief Cabinet Secretary Yasuo Fukuda, the top government spokesman, expressed similar sentiments. ``We are far from optimistic,'' he said. ``We think the labor situation remains severe.''