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Friday, January 29, 1999 Published at 09:26 GMT


World: Asia-Pacific

Worst year ever for Japanese jobs

Japanese employees can no longer expect a job for life

Unemployment in Japan has fallen slightly, but new figures released by the government show 1998 as the worst year on record.

The unemployment rate for December fell by 0.1% to 4.3%, but the decline was attributed to seasonal factors and not to any improvement in the economy.

Overall, last year's average stayed at the all-time low of 4.1%, and analysts say the jobless total will most likely continue to rise.

"Japan had a jobless rate of under 2% for 15 years during the high-growth era from 1958 to 1973 and after the oil shocks it was under 3%, even during the 1992-94 slump," said Kyoto University Economics Professor Takamitsu Sawa.

"Now it has risen sharply to a level higher than in the United States. It might not seem that bad, but for Japan it's dreadful," Professor Sawa added.

Some economists say unemployment will exceed 5% in the 2000-2001 fiscal year.

Building industry suffers

The latest figures show construction industry as one of the hardest hit, with 20,000 jobs lost in December alone, as the longest recession since World War II means that few firms are ordering new buildings.

The recession has also reduced consumer spending, which has in turn affected the manufacturing industry.

Spending plans announced last year by Prime Minister Keizo Obuchi's new government - which include large-scale building plans - have not yet had any effect.

Our Tokyo Correspondent, Juliet Hindell, says that with thousands of school and university graduates due to join the workforce in April, prospects are worst for people between the ages of 15 and 24.

At the same time as the jobless figures were announced, the government also said that consumer prices overall rose last year. However, prices in Tokyo - seen as an indicator of what will happen in the rest of the country - fell very slightly in January.

It could be the start of a deflationary trend. But our correspondent says that if people believe prices are falling, they may spend even less money, hoping that better bargains will be available in the future.

Job insecurity will also encourage people to save rather than spend, which does not bode well for economic recovery in Japan.



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