Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Tuesday, March 30, 1999 Published at 09:00 GMT 10:00 UK


Business: The Economy

Japan's jobless rate hits record high

More Japanese workers are pacing the streets for work

Japan's jobless rate has jumped to a record 4.6% in February, sapping hopes the country will soon emerge from its darkest recession since World War II.

The unemployment rate rose sharply from the previous month's 4.4% - a record for three straight months - and swelled the ranks of jobless to a historic three million people.


[ image: The Government is desperate for Japanese consumers to spend more]
The Government is desperate for Japanese consumers to spend more
"I have to admit that the situation in February was harsher than expected," said Taiichi Sakaiya, chief of the Economic Planning Agency.

"The strength of the recovery is very weak."

The sour figures come as Japan as battles against its deepest economic slowdown in 50 years, and is a bitter blow for a country where many companies once prided themselves on offering the promise of life-time employment.

The government has pumped trillions of yen into the economy in an all-out campaign to persuade consumers to spend.

But amid the worsening jobs situation, spending by Japanese wage earners' households fell 4.1% in real terms in February from a year earlier to an average of 303,264 yen ($2,525).

They spent just 67.8% of their disposable income, down from 70.9% in January.

Spending plans

The grim statistics were already putting pressure on the government to do more to bolster growth.

Finance Minister Kiichi Miyazawa said he was ready to invest more: "I'm worried about the unemployment situation."

"Although we've taken steps necessary to ease the jobless problem, we're ready to increase budget spending for jobs if necessary."

Slimming down to survive

A major factor behind spreading joblessness is corporate restructuring.


[ image: Japan is mired in its worst recession since Wolrd War II]
Japan is mired in its worst recession since Wolrd War II
Many top-flight Japanese companies fighting to regain competitiveness are trimming staff, selling off subsidiaries and closing offices.

The total number of people without jobs rose by 670,000 from a year earlier to 3.13m - the most since the Management and Co-ordination Agency began recording the data in 1953.

Over the year the total number of people in employment shrank by 770,000 to 63.34m, the agency said.

It was the largest-ever decrease in the number of job holders and marked the 13th consecutive month of declines.

'Worse to come?'

The statistics were not much of a surprise to some analysts.

"It's certainly consistent with the weakness we're seeing in the Japanese economy, particularly in private demand," said Cameron Umetsu, senior strategist for Warburg Dillon Read Japan Ltd.

"It promises to get even worse as underlying conditions deteriorate."

The new jobless rate cements the reversal of fortunes between Japan and its top economic competitor, the United States.

In the 1980s, it seemed Japan was on track to supplant the United States as the world's supreme economic power.

Now Japan is suffering from an unemployment rate that is pulling further ahead of the US rate of 4.3%.

The numbers of Tuesday were the latest in a long string of dour economic announcements in Japan.

The government said earlier this month that gross domestic product shrank 0.8% in the last three months of 1998, putting the economy on track to shrink 3.2% in the 1998-99 fiscal year if the pace continues.

Most analysts expect the economy to shrink in the next fiscal year, which begins 1 April.

Japan is fighting the recession with its biggest spending spree in history.

The government has earmarked a mammoth 81.9 trillion yen in the next budget, for public works spending, tax cuts and other stimulus measures.

Officials are also spending 7.5 trillion yen ($62.5bn) to bail out the country's troubled banks, which are saddled with loads of bad debt from the collapse of the speculative bubble in the early 1990s.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

29 Jan 99 | Asia-Pacific
Worst year ever for Japanese jobs

30 Mar 99 | Asia-Pacific
Japan plans record spending

25 Dec 98 | Far East
Japanese unemployment hits new record

14 Dec 98 | The Economy
Business despair in Japan





Internet Links


Japanese Economic Planning Agency

Tokyo Stock Exchange


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree