Posted on: Friday, December 27, 2002

Jobless rate in Japan dips from record high

By Hans Greimel
Associated Press

TOKYO — Japan's unemployment rate dropped to 5.3 percent in November from a record high the month before, offering some relief from jobless levels that have soared for most of the year amid a sour economy.

The figure released yesterday by the government Labor Force Statistics Office is the lowest since last winter.

But it still underlined how tough times are throwing large numbers of Japanese out of work as the country struggles through a decade-long slowdown. Jobs had been dwindling for months in almost all sectors except for services, such as construction and manufacturing.

In November, unemployment dropped to 5.3 percent, from a record 5.5 percent the month before. The October rate matched a high hit last December, the worst unemployment rate since the government began keeping such records in the 1950s.

The economy rebounded earlier this year on the back of resurgent overseas demand, but cost-cutting by weakened companies buoyed joblessness throughout the summer.

The jobless rate had been at 5.4 percent since May, when the government said the economy bottomed out from its worst postwar recession.

Still, the November figures were better than expected. Economists polled by Dow Jones News services forecast that unemployment would continue rising to a record 5.6 percent in November.

The government has promised to speed up the write-off of bad debts piled at the nation's banks, which have been blamed for dragging down the economy.

The effort has won praise from Washington as a necessary step to get the Japanese economy growing again. But it is also expected to tighten lending at the banks in the short run and probably send some companies into bankruptcy, pushing more people out of work.

Anticipating job losses ahead, the government also has promised to strengthen "safety net" measures to create jobs through help for small and medium-size companies.

Japan's unemployment rate had been at 5.4 percent for five months straight since May. It was at 5.3 percent in January and February and at 5.2 percent in March and April.