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Doubts about an economic recovery:
Japan’s jobless rate hits record high
JAPAN: Japan’s unemployment rate is at a record high, data
showed Friday, raising doubts about an economic recovery and piling
pressure on embattled Prime Minister Taro Aso two days ahead of an
election.
The jobless rate rose to a worse than expected 5.7 percent in July,
up from 5.4 percent in June, the government said.
More than one million people lost their jobs over the past year,
lifting the unemployment total to 3.59 million, as companies slashed
costs to cope with the worst recession in decades.
It is unwelcome news for Aso’s long-ruling Liberal Democratic Party
(LDP), which is trailing far behind the main opposition Democratic Party
of Japan (DPJ) in opinion polls ahead of Sunday’s general election.
“There’s no doubt the job situation is worsening,” said Chief Cabinet
Secretary Takeo Kawamura, the top government spokesman. “The economy is
still in a recovery phase. But we must pay close attention to the job
situation.”
Official figures last week showed the world’s second largest economy
returned to positive growth for the first time in five quarters, limping
out of recession, but many ordinary people say they are not feeling the
recovery.
“The record high jobless rate is bad news for the LDP because
ordinary people are sensitive to the job situation,” said Masatoshi
Sato, chief strategist at Mizuho Investors Securities.
There are also fears that the economy could stumble again as the
effects of the government’s massive economic stimulus packages fade.
Consumer spending remains weak in Japan, leaving the economy highly
dependent on exports. Household spending fell 2.0 percent in July from a
year earlier, sharply reversing a 0.2 percent rise in June, data showed.
“The recent growth was mainly due to government spending and was not
a self-sustaining recovery in the Japanese economy,” said Hiroshi
Watanabe, economist at Daiwa Institute of Research.
“We’re unlikely to see a swift recovery for the time being.
“Political uncertainty is also overshadowing prospects for the
Japanese economy as we are still unsure about details of the DPJ’s
economic policies,” he said. Deflation also deepened last month with
core consumer prices dropping 2.2 percent a year earlier — the fastest
pace on record. Tokyo, Friday, AFP |
