Tokyo, May 31 (Bloomberg) -- Japan's economy lost 430,000 jobs in April and an even greater number of people gave up looking for work, discouraged by job cuts at manufacturers such as Hitachi Ltd. and Toshiba Corp. The unemployment rate was unchanged at 5.2 percent as 480,000 people left the workforce, the government's statistics bureau said. Economists had expected the jobless rate to rise to 5.3 percent, less than December's record 5.5 percent. Unemployment will probably rise more as manufacturers slash tens of thousands of jobs to trim costs even as they raise production to meet demand from the U.S. and Asia, economists said. That could weigh on consumer spending, which makes up 55 percent of the economy, and retard a recovery from Japan's recession. ``It's clear things have bottomed, but it's pretty hard to get excited about the growth rate,'' said Peter Morgan, chief economist at HSBC Securities Japan Ltd. ``Last quarter's pace is unlikely to be repeated.'' While surging exports fueled growth of 1.5 percent last quarter, economists estimate, the world's second-largest economy is probably shrinking again as demand from the U.S. cools and prices fall at home. Tokyo's core consumer prices, which exclude fresh foods, fell 0.1 percent this month, seasonally adjusted, a separate report showed. The International Monetary Fund expects the economy to shrink 1 percent this year. Hitachi, which will resume chip production at a factory near Tokyo to meet an anticipated increase in personal computer sales, is targeting 7,000 more job cuts by June after eliminating 19,000 last year. Toshiba, which has restarted production of semiconductor wafers in western Japan, is trimming its workforce by 18,800 over the next two years.

Bankruptcies
Isuzu Motors Ltd., which lost 43 billion yen last year, has forecast net income of 3 billion yen this year as it sheds nearly a quarter of its workforce. Service jobs are also disappearing as All Nippon Airways and other money-losing companies dependent on spending at home try to return to profit. ANA, Japan's second-biggest airline, will cut 600 more jobs than earlier planned because of falling demand for travel and increased competition. To end a five-year run of losses this year as the government cuts public works spending by 11 percent, contractor Fujita Corp. plans to trim its workforce by a third over the next three years. Jobs are also drying up as more companies fail. An average of 54 went bankrupt each day last month. This week, Nippon Kakoh Seishi Co., a papermaker that employed 1,191 people as of March 2001, filed for bankruptcy.

Household Spending
The number of jobs available for every 100 applicants at government-run job centers rose to 52 from 51 in March. Still, that means there are two people chasing every available job. In another sign that job seekers are getting discouraged, the employment participation rate, which measures the number of people in the workforce, fell 0.9 percentage point to 61.5 percent, today's report said. The shortage of jobs is weighing on consumer spending, which accounts for 55 percent of Japan's economy. Still, spending by households headed by a salaried worker rose 0.8 percent last month from March, seasonally adjusted, a separate government report showed. From a year earlier, it rose 0.9 percent, versus the 0.7 percent decline economists expected.