Tokyo, March 30 (Bloomberg) -- Japan's jobless rate unexpectedly fell in February andspending by salaried workers rose for a third month, giving investors some respite from aflow of bad news on the world's second-biggest economy. Unemployment fell to 4.7 percent, the government's statistics bureau said. Economistshad expected the rate to remain at a record high 4.9 percent. A separate report showedspending by households headed by a salaried worker rose a more-than-expected 3.1percent last month from January. Stocks rose as the reports eased concern the economy is sliding into recession asexports decline and production slows. The benchmark Nikkei index gained as much as2.5 percent. ``The overall story is not one of unmitigated disaster,'' said Richard Jerram, chiefeconomist at ING Baring Securities (Japan) Ltd. ``It's simply the improvement over thepast year-and-a-half has started to be undermined by the hit from the export sector.'' The relief may be short-lived. The jobless rate may rise again as soon as next month asuniversity graduates start looking for work and as companies fire workers. The number of jobs available for jobseekers at government-run work centers fell for thesecond straight month. There were 64 jobs for every 100 applicants, down from 65 inJanuary. The new job offers ratio, which divides the number of jobs offered for the first time by thenumber of new jobseekers, fell to 1.08 in February from 1.11 in January, the lowest sinceJune. That signals it's becoming harder for jobseekers to find work. The number of ``jobs on offer is declining as production keeps falling,'' said SusumuOkano, chief economist at Daiwa Institute of Research Ltd.. ``The jobless rate is set togo beyond 5 percent.''
Job Cuts
Just this week, stereo maker Aiwa Corp., which expects to post a second straight lossthis fiscal year, said it will eliminate 30 percent of its 2,300 workers by next March.Sanyo Electric Co., which makes two-fifths of the world's mobile-phone batteries, said itplans to cut about 12 percent of its workforce. The economy added 280,000 jobs last month, and 170,000 people began looking forwork. A separate report showed consumer prices in Tokyo, excluding fresh food, fell 1.1percent this month from a year ago, matching last month's record decline. Nationwide,prices excluding fresh food fell 0.6 percent in February from a year ago. The yen rose after the reports were released, to 122.96 to the dollar from 123.75 earlier. Iterased those gains, and was recently trading at 124.21 to the dollar after economicminister Taro Aso said U.S. government officials had talked about a weaker yen beforePrime Minister Yoshiro Mori met U.S. President George W. Bush earlier this month. Thetwo leaders didn't talk about the currency, Aso said.
Spending
The 3.1 percent increase in spending topped expectations of a 0.3 percent gain. From ayear ago, salaried-worker spending rose 0.9 percent. The propensity-to-spend ratio, which rises when people spend more and save less,climbed to 74.4 percent last month from 71.7 percent in January. ``There's clearly been a strong pickup in private consumption in the new year,'' saidJames Malcolm, an economist at J.P. Morgan Securities (Asia) Ltd. He expects theeconomy grew 0.4 percent this quarter, after expanding 0.8 percent in the fourth quarterof last year.