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Bloomberg News Service
TOKYO — Amid increasing concern over the outlook for Japan’s economy, spending by Japanese wage earners remained flat in real terms in January compared to a year earlier, the government said today, and Japan’s jobless rate held steady at a record 4.9 percent.
The government said that in January the number of jobs available fell for the first time in 20 months, suggesting unemployment is set to rise as companies from Mitsubishi Motors Corp. to Daiei Inc. lay off thousands of workers.
"The economy is deteriorating faster than expected," said Tomoko Fujii, senior economist at Nikko Salomon Smith Barney Ltd. "Unemployment could easily reach 5 percent next month. There’s no clear sign the economy will recover anytime soon."
In January, spending by households headed by a salaried worker rose 0.8 percent from December, seasonally adjusted, another report showed. From a year ago, spending was unchanged. Consumer prices in Tokyo, excluding fresh food, fell 0.3 percent last month, to be down a record 1.1 percent from a year ago.
Wage earner spending is an important gauge of personal consumption, which accounts for about 60 percent of Japan’s gross domestic product. The flat figure in January, following a small rise in December, reflected growing worries over the slowing economic recovery.
The Nikkei extended its decline, falling below 12,500 points for the first time in more than 15 years, to a low of 12,428.48.
Not enough jobs are being created to absorb the thousands of people who have lost their jobs as companies trim their work forces.
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