TOKYO, May 30 - Japan's unemployment rate was stuck at 5.4 percent in April, within a whisker of a record high, as companies fighting for survival in a downtrodden economy sought to stay lean. The jobless rate, which was in line with economists' forecasts, was just below a record 5.5 percent set in January, figures from the Ministry of Public Management, Home Affairs, Posts and Telecommunications showed on Friday. "At 5.4 percent, the jobless rate is still at a high level. The job market remains in a tough condition and we need to keep a close eye on it," a ministry official told reporters.
The number of employed workers fell by 270,000 from a year earlier, the 25th straight month of decline. Reflecting a cautious attitude among firms towards boosting their permanent workforce, full-time jobs shrank for the 21st month, while part-time positions increased for the 16th month. Separate data from the Ministry of Health, Labour and Welfare showed the jobs-to-applicants ratio was unchanged from the previous month at 0.60, meaning there were 60 jobs available for every 100 job-seekers. The grim figures come as concern mounts that last year's export-driven economic recovery might be faltering in the face of a global economic slowdown -- exacerbated by the SARS epidemic hitting Japan's Asian trade partners -- and a higher yen, which makes Japan's exports less competitive.
Data earlier in the month showed Japan's gross domestic product for the first three months of the year was flat, with exports turning into a net drag on growth.
PERSISTENT DEFLATION
Household spending data also released on Friday suggested that job insecurity was taking its toll on consumption and consumer prices data showed stubborn downward pressure on prices. Average monthly spending by a wage-earning worker's household fell 1.0 percent in April from a year earlier, while the core nationwide consumer price index (CPI) was down 0.4 percent in April from a year earlier -- the 43rd straight month of decline.
Consumers cut outlays for eating out, household appliances and clothing. Spending on overseas travel fell 64 percent due in part to the fallout from the Iraq war and the SARS scare. Still, compared with the even bleaker figures a month earlier, the picture was not so bad. Household spending was up 1.5 percent from March on a seasonally adjusted basis. A ministry official said this was due in part to payment for cars bought ahead of an environmental regulation change.
The core CPI, which excludes volatile fresh food prices, was flat compared with March on a seasonally adjusted basis and up 0.3 percent on an unadjusted basis. "The fact that consumption held up pretty well is encouraging but you can also see that disposable income has not changed much from last year," said Chris Walker, an economist at Credit Suisse First Boston. "Even though the good CPI result was largely because of a rise in medical costs, it still looks fairly positive overall."//