Tokyo, Nov. 6 (Bloomberg) -- Japanese household spending rose for the first time in three months in September as consumers spent more on cell phones, clothing and movie tickets. The rebound probably won't last, economists said. Spending rose 5.1 percent from the month before, seasonally adjusted, following a 1.7 percent decline in August, the government statistics bureau said. From a year earlier, spending rose 5.4 percent. Economists had expected a 3.5 percent rise. Consumer spending, which makes up 55 percent of Japan's economy, has been hurt as companies such as Advantest Corp. cut jobs and wages. Consumers are likely to reduce spending as the government pushes lenders to write off more of their 52.4 trillion yen ($429 billion) in bad loans, forcing borrowers into bankruptcy.
``Consumer spending is likely to remain weak for the time being,'' said Yasukazu Shimizu, a senior economist at Aozora Bank Ltd. ``We won't see any rebound in spending anytime soon.'' Japan's index of leading economic indicators rose above the level that suggests the world's No. 2 economy will expand, another report today showed, amid optimism over improving job prospects.
The index, which measures job offers, consumer confidence, and other indicators of economic performance in about six months, rose to 60 percent in September from a revised 45.5 percent in August. A reading above 50 signals an expansion. In August, the index fell below 50 percent for the first time in eight months. Japanese workers were more optimistic about their job prospects in September, when the number of openings for every 100 applicants rose to 55 from 54. Their optimism may fade as a slowdown in the U.S. undermines Japanese exports and production, economists said.
Job Cuts
The October leading index may fall back below 50 percent because of falling share prices and weakness in the housing market, said Yoshihiko Senoo, head of research at the government's Economic and Social Research Institute. Companies are cutting jobs as slumping exports threaten to throw Japan back into recession for a fourth time in a decade. Japan's economy grew 0.6 percent in the second quarter, the first gain in more than a year. Advantest Corp., the world's biggest maker of memory-chip testing equipment, said it planned to cut 600 jobs after posting a loss in the six months to Sept. 30. Equipment sales will probably fall in the fiscal second-half, the company said.
Japan's unemployment rate held at 5.4 percent for a fifth month in September, just shy of December's record 5.5 percent. Cash earnings -- including salary, overtime pay and bonuses -- of employees at companies with five or more workers fell 1 percent in September from a year earlier, following a 3 percent decline in August, a separate government report showed. September's gain in household spending was partially offset by declines in spending on education and food. In the three months ended Sept. 30, spending rose 1 percent from the second quarter, a second straight rise.// quote.bloomberg.com