The latest government figures put the jobless rate at 4.4%, equal to that of the US. The figure is the highest since the Japanese government began collecting data in the present form in 1953.

Analysts say declining consumer spending has forced Japanese companies to lay off workers.

Economic Planning Agency chief Taiichi Sakaiya said the unemployment rate "is a figure we see with grave concern." He warned that the situation could still get worse.

"There's strong pressure for the jobless rate to rise," he said.

The jobless rate for men increased by 0.3 percentage points from the previous month to 4.5% while that for women edged up by 0.1 percentage points to 4.4%. These ratios were also record highs.

'Extremely severe'

The government's main spokesman, Chief Cabinet Secretary Hiromu Nonaka, described the employment situation as "extremely severe".

"We are once again determined to create one million or more new jobs by implementing emergency economic measures," Mr Nonaka promised.