27 September 2002, 09:10  Japan Aug. Jobless Rate Held at 5.4% on Bankruptcies

/www.bloomberg.com/ Tokyo, Sept. 27 (Bloomberg) -- Japan's unemployment rate held near a record high for a fourth month and 50,000 more people were out of work in August as a stalling economy forced retailers and trucking companies to either cut staff or close down.
The unemployment rate was 5.4 percent, just below the record 5.5 percent reached in December, a government report said. The world's second-biggest economy shed 20,000 jobs in August, while 40,000 people entered the workforce. The number of unemployed rose to 3.65 million.
Unemployment may rise, economists said, as 54 companies go bust a day. Government plans to speed up the disposal of 52.4 trillion yen ($428 billion) of banks' bad debts are likely to push more companies into bankruptcy.
``With the government's plan to speed up bad-debt disposal and companies still pushing ahead with restructuring, Japan's labor market will worsen in the months ahead,'' Yukari Sato, a senior economist at J.P. Morgan Securities (Asia), said.
The unemployment rate has more than doubled in the last decade, curbing consumer spending, which makes up about 55 percent of the economy. Another government report today showed that spending by salaried workers fell 2 percent in August from a month earlier, and 0.3 percent from the same month a year ago.
That's pushing prices down. Consumer prices in Tokyo, excluding fresh food, fell 0.4 percent in September from August, a separate report today showed. Tokyo core consumer prices fell 0.9 percent from a year ago, extending a four-year slide.
``There are no reasons to expect household spending to improve as the jobless rate stays high and Japan's labor market worsens,'' said Tomoko Fujii, a senior economist at Nikko Salomon Smith Barney.
Job Cuts
Fujitsu Ltd., Japan's biggest business computer maker, has slashed more than 5,000 jobs in the last two months on falling overseas orders as the U.S. economy slows.
Mitsubishi Cable Industries Ltd., which makes communication equipment, on Wednesday said it will shed about 670 jobs by offering early retirement and moving workers to a subsidiary, as a global slump in demand for its equipment ate into earnings. The Tokyo-based company also reversed its profit forecast to a 6.2 billion yen ($51 million) loss for its fiscal year ending March 31.
A separate report today from the Ministry of Health, Labor and Welfare showed there were 54 jobs for every 100 applicants at job placement centers last month.
Corporate bankruptcies rose in 11 of the 12 months to August, according to credit researcher Tokyo Shoko Research Ltd. A record 25 publicly traded companies have failed this year, surpassing the previous record of 14 set last year.

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