TOKYO (AFX-ASIA) - The Cabinet Office maintained its economic assessment for June, reiterating that the economy has bottomed out, though it continues to face difficult circumstances. This was the first time in four months that the office did not upgrade its overall economic assessment, though it did upgrade its view of production, corporate profits and employment. The assessment for corporate investment and private consumption were maintained, while housing investment was downgraded. The view of the economic outlook was also maintained. The Cabinet Office said production continued to benefit from exports and an improvement in companies' inventory positions, while increased overtime suggests the possibility of increased future incomes. Output is "bottoming out with incipient improvement in some areas", the assessment said in June, compared with the reference in the previous month simply to "bottoming out". "Production is flat and the decline has stopped but this is not definitely an increasing trend," an official said, citing April data and the forecast for May. Industrial output in April rose 0.2 pct month-on-month, while the Ministry of Economy, Trade and Industry forecast a rise of 5.1 pct for May. "Corporate profits are showing signs of bottoming out," he added. The Cabinet Office had said in the previous assessment that corporate profit was showing "a sharp decline at manufacturers". The official also noted improved profits and production are feeding through to increased overtime payments that may also assist the economic rebound. "Overtime is increasing, though the employment situation remains severe. The rise in overtime will have a positive impact on wages in the future," he said. "We are closely watching the development of new job offers, which turned upward in April, posting growth of 6.8 pct month-on-month after a fall of 0.3 pct in March," the official said. The office added that the consumer confidence index is also firm, adding that private consumption is flat but with "firmness observed in some areas such as foods and automobiles." Nevertheless, investment spending continues to look weak. "Corporate capital investment is declining and will remain on a falling trend," the office said, also downgrading its housing investment assessment. "Housing investment is weakening," it said, compared with the previous month's comment that "housing investment is almost flat". The official noted the construction of new homes is below the 1.15-1.12 mln annualised rate considered a boom-bust threshold, due to weakening construction of condominiums, particularly in the metropolitan areas of Tokyo and Osaka. The Cabinet Office also maintained its assessment of the economic outlook. "The impact of the increase in exports and compression of inventory adjustment is expected to spread to the overall economy and bring about an incipient recovery in the economy," it said. However, it maintained the view that "concerns over downward pressure on final demand that may be exerted by such factors as severe employment and wage conditions." The report had said in May that "the increase in exports and progress in inventory adjustments are expected to prop up the future development of the economy."