Japan Gets Dismal Data Amid Worries Over Recoverygreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Japan Gets Dismal Data Amid Worries Over Recovery Monday December 25, 7:44 PM EST By Yoko Nishikawa TOKYO (Reuters) - Japan's struggle to emerge from a decade-long slump looked to be in more trouble on Tuesday, with data showing a rise in unemployment and a dip in household spending seen as key to recovery.
Another dismal pointer to the economy's fragility was the announcement that consumer prices in Tokyo fell by one percent this year, a record decline.
Japan's jobless rate rose to 4.8 percent in November from 4.7 percent the previous month, while spending by wage earners' households fell a real 2.3 percent in November from a year earlier, the Management and Coordination Agency (MCA) said.
The jobless rate hit a record 4.9 percent in February and March.
"Worries about economic prospects, especially about job conditions from the consumers' point of view, are dampening personal spending," said Takao Hattori, economist at Tsubasa Research Institute.
The figures are bad news for Japanese policy-makers, who are desperate to get the world's second-largest economy on a self-sustaining recovery path.
Other signs of a slowdown in Japan's recovery have recently begun appearing, with growth in exports and corporate capital spending, the key driving forces of the recovery so far, both decelerating.
"I think the yellow light is blinking. The January-March quarter will be a crucial period for the Japanese economy," said Kazuhiko Ogata, senior economist at HSBC Securities Japan.
Despite a near-record high jobless rate, an MCA official pointed to some bright spots, saying the number of people in work rose in November, meaning the job market is expanding.
Some economists agreed.
"Although the jobless rate worsened, the number of employees and the jobs-to-applicants ratio rose. Employment conditions are gradually improving," HSBC's Ogata said.
"But with some big corporate bankruptcies this year and weak stock prices hurting sentiment, personal consumption is unlikely to get better anytime soon," he added.
The jobs-to-applicants ratio rose to 0.65 in November, meaning there were 65 openings for every 100 job seekers, up marginally from 64 in October, the Labor Ministry said.
STAGNANT PERSONAL CONSUMPTION
Stagnant job conditions, along with weak income conditions, have been partly blamed for weak personal consumption -- the largest and weakest chunk of the economy.
"Personal consumption continues to be weak," said Masato Okamoto, a senior MCA official told reporters.
The household spending data showed that income rose 0.6 percent in November in real terms, but it fell 0.1 percent in nominal terms, the 17th consecutive month of decline.
Separately, the Trade Ministry announced that nationwide retail sales fell 0.7 percent in November from a year earlier, the 44th consecutive month of decline. Sales at large stores, which are more sensitive to changes in consumer spending, fell 4.1 percent, excluding new store openings and closures.
Amid stagnant consumer spending, fierce competition resulted in a fall in prices of durable goods and dining out, dampening consumer prices, said Hideyuki Suzuki, head of the price research division at the Economic Planning Agency (EPA).
Nationwide consumer prices in November dipped 0.5 percent year-on-year, down for a record 15th consecutive month. Tokyo area consumer prices, which precede nationwide data by one month, dipped 0.6 percent in December from a year earlier for a record 16th consecutive month of decline, the MCA said.
In calendar 2000, Tokyo area consumer prices fell 1.0 percent from the previous year, the biggest such fall since 1971, the earliest year for which comparisons are available under present calculation methods.
It is the first time Tokyo consumer prices have fallen for two years in a row. Personal Comment: This type of info is a critical piece of the international puzzle. Biggest decline of consumer prices in 29 years! That's almost as big as AT&T decreasing their dividend by 83% which happened to be the first dividend increase in there 100+ year history. These are CRITICAL economic events which are harbingers of things to come.
-- Guy Daley (firstname.lastname@example.org), December 25, 2000