30 October 2001, 08:15  2ND LD: Japan calls record 5.3% jobless rate 'emergency'

TOKYO, Oct. 30 (Kyodo) - (EDS: UPDATING WITH ANNOUNCEMENT OF EMERGENCY, ADDING COMMENTS BY LABOR MINISTER) Japan's unemployment rate soared by 0.3 percentage point in September from the month before to a record-high 5.3%, or 3.57 million people out of work, the government reported Tuesday, with the labor minister calling it "an emergency." Health, Labor and Welfare Minister Chikara Sakaguchi said the unemployment situation has reached a "state of emergency," with the effects of the Sept. 11 attacks on the United States and Japan's mad cow disease problem expected to "come out big in October" at a time when Japan is just starting to boost disposal of bad loans at banks.
The disposal of bad loans could spark more corporate bankruptcies and restructuring, adding to unemployment, analysts said. Full-time workers were particularly affected by job losses in September, with male unemployment rising 0.3 point to 5.4%, while the rate for women climbed 0.4 point to 5.2%, both record figures, according to the preliminary report issued by the Public Management, Home Affairs, Posts and Telecommunications Ministry. The increase in the overall unemployment rate was the largest since the 0.5-point surge in March 1967, and came along with the first downturn in payrolls in 17 months. The jobless rate is the third highest among major industrialized countries that have released their September data, following 9.4% in Germany and 7.2% in Canada. The figure was 4.9% in the United States, 3.3% in South Korea and 3.1% in Britain, while the August data for France was 9.0% and the July rate in a quarterly survey for Italy was 9.4%.
The latest data "reflect the spate of restructuring moves by major companies," Yotaro Sawada, head of the Employment Security Bureau at the Health, Labor and Welfare Ministry, told reporters, predicting the severe jobs situation would continue for a while in line with the overall economic slump. The Sept. 11 attacks in the U.S. and the plunge in beef consumption after Japan's first case of mad cow disease was confirmed in September might also have affected employment and will probably continue to do so, Sawada said. The job market was also hit by big corporate failures, including the collapse of supermarket chain Mycal Corp., in the reporting month.
The labor ministry downgraded its assessment on the current jobs situation, saying it is "increasing in severity." The most troubling finding is that unemployment for heads of households jumped 50,000 to 930,000. One economist described the sharp rise as a "change in the content and quality of the jobless rate" as the economic recession has started to affect Japan's main breadwinners along with its young. The ministry said the index for job offers to job seekers fell 0.02 point to 0.57, its lowest since May last year, due to a 0.4% gain in job seekers, while offers fell 2.2%. The index means only 57 jobs were available for every 100 seekers. New job offers -- a leading indicator of the jobs situation -- fell 8.5% from a year earlier, with those from electrical machinery makers tumbling more than 50%, down for the third consecutive month, and those from information service companies also declining. The number of people out of work increased for the sixth successive month -- by 370,000 from a year earlier to a record 3.57 million, with those laid off rising 100,000 to 1.09 million, the public management ministry said.
Those who voluntarily quit their jobs increased for the sixth month in a row -- by 180,000 to 1.27 million. The number of employed people declined for the first time in 17 months -- by 530,000 to 53.44 million, due chiefly to a 570,000 decrease in full-time workers. These figures include a 450,000 fall in employees at large companies with at least 500 workers, and a 530,000 drop in the manufacturing sector. The workforce in the manufacturing sector slid 4.9% to 12.61 million for the fifth consecutive monthly decline, and that in the construction sector fell 4.3% to 6.48 million, down for the 10th straight month.
The transport and communications sector saw its workforce edge up 0.7% to 4.14 million, up for the fourth successive month. The number of people employed in the wholesale, retail and restaurant sector shrank 2.2% to 14.28 million, a larger fall than in August. Sawada said it is unclear whether these figures already reflect the falloff in air travel after the terrorist attacks and the shunning of beef because of mad cow disease. Payrolls in the services industry, however, increased for the 19th successive month, rising 4.1% to 17.88 million, the ministry said. The overall number of people in work, including the self-employed, fell for the sixth month in a row, with the margin of decline expanding to 840,000, close to levels seen in 1998-1999 amid the country's financial crisis, the official said. The number of self-employed and those engaged in family businesses fell 470,000 to 10.24 million, down for the 20th month in a row.

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