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Unemployment in Japan rose in November and consumer prices continued to decline
Fri, Dec 25 2009, 01:48 GMT
by ecPulse.com analysis team
Reports today showed unemployment in Japan rose in November meeting analyst’s forecasts, despite improvements witnessed in the manufacturing sector during the last period, while consumer prices decline in a slower pace. On the other hand, household spending rose more than expected that shall be followed by an incline in retail trade.
Jobless rate in Japan rose to 5.2% in November compared with a previous 5.1%, and the reading came meeting analyst’s expectations. The job to applicant ratio rose to 0.45% in November meeting forecasts compared with a prior 0.44%.
However, unemployment rate rose four the first time in for months as companies still suffering from weak domestic demand and weak sales, which is pressuring companies to save labor costs, especially that business conditions remain unstable.
Improvements witnessed in the nation’s industrial production didn’t reflect on the labor market, having in mind that manufacturing out put continued to rise in the past eight months. Yet, we still believe that conditions in the labor market became much better if we considered the first three months of this year when jobless rate rose to 5.8%.
Moreover, the government allocated 600 billion yen from its new 7.2 trillion yen stimulus package, to support employment as the government is planning to fund an expansion of a subsidy program that encourages companies to keep workers on their payrolls, besides distributing money to employment offices.
Household spending rose for the fourth straight month in November and it came in at 2.2% compared with a previous 1.6%, while it rose more than analyst’s expectations of 0.4%.
Today’s report showed that spending on food declined 0.9% in November from a year earlier following an incline by 1.5% in October, while spending on entertainment climbed 6.9% versus 1.6%, and spending on clothing fell 4.3% in November after it slipped 2.3% in October.
Moving to the yearly consumer prices index, which declined 1.9% in November from a year earlier compared with a prior decline by 2.5%, while forecasts referred to 2.0%. Consumer prices excluding food and energy slipped 1.0% after a decline by 1.1%, and it was anticipated to decline 1.1%.
Consumer prices continued to decline adding signs that deflations risks will weigh on economic recovery from recession. The Bank of Japan decided to keep interest rates at 0.10% in December, in addition to providing 10 trillion yen of short term loans for commercial banks, as a respond to the government’s calls to fight deflation and the surging yen.
Yet, Mr. Shirakawa the BOJ governor expected weak demand to continue to weigh on prices, while he added that the decline in core inflation may slow to 1% early next year, as oil prices inclined. Noteworthy that crud oil rose about 60% this year.
Reports today showed unemployment in Japan rose in November meeting analyst’s forecasts, despite improvements witnessed in the manufacturing sector during the last period, while consumer prices decline in a slower pace. On the other hand, household spending rose more than expected that shall be followed by an incline in retail trade.
Jobless rate in Japan rose to 5.2% in November compared with a previous 5.1%, and the reading came meeting analyst’s expectations. The job to applicant ratio rose to 0.45% in November meeting forecasts compared with a prior 0.44%.
However, unemployment rate rose four the first time in for months as companies still suffering from weak domestic demand and weak sales, which is pressuring companies to save labor costs, especially that business conditions remain unstable.
Improvements witnessed in the nation’s industrial production didn’t reflect on the labor market, having in mind that manufacturing out put continued to rise in the past eight months. Yet, we still believe that conditions in the labor market became much better if we considered the first three months of this year when jobless rate rose to 5.8%.
Moreover, the government allocated 600 billion yen from its new 7.2 trillion yen stimulus package, to support employment as the government is planning to fund an expansion of a subsidy program that encourages companies to keep workers on their payrolls, besides distributing money to employment offices.
Household spending rose for the fourth straight month in November and it came in at 2.2% compared with a previous 1.6%, while it rose more than analyst’s expectations of 0.4%.
Today’s report showed that spending on food declined 0.9% in November from a year earlier following an incline by 1.5% in October, while spending on entertainment climbed 6.9% versus 1.6%, and spending on clothing fell 4.3% in November after it slipped 2.3% in October.
Moving to the yearly consumer prices index, which declined 1.9% in November from a year earlier compared with a prior decline by 2.5%, while forecasts referred to 2.0%. Consumer prices excluding food and energy slipped 1.0% after a decline by 1.1%, and it was anticipated to decline 1.1%.
Consumer prices continued to decline adding signs that deflations risks will weigh on economic recovery from recession. The Bank of Japan decided to keep interest rates at 0.10% in December, in addition to providing 10 trillion yen of short term loans for commercial banks, as a respond to the government’s calls to fight deflation and the surging yen.
Yet, Mr. Shirakawa the BOJ governor expected weak demand to continue to weigh on prices, while he added that the decline in core inflation may slow to 1% early next ear, as oil prices inclined. Noteworthy that crud oil rose about 60% this year.