TOKYO (AFP) -- Japan's unemployment rate held steady at a seven-year low in April while industrial production rose, helping to underpin the economic recovery, official figures showed Tuesday.

At the same time, however, household spending declined for a fourth consecutive month, the government said.

The unemployment rate stood at 4.1 percent in April, unchanged from March, the Ministry of Internal Affairs and Communications said.

The jobless total dropped by 260,000 from a year earlier to 2.84 million.

The unemployment rate, which was in line with market forecasts, is watched closely for evidence of increased hiring by Japanese companies and the positive knock-on effects on consumer spending.

Despite the drop in the jobless total, however, spending by Japanese households fell 2.0 percent in April from a year ago after stripping out the effect of price changes, although bad weather was seen as partly to blame.

Meanwhile Japan's industrial output rose by 1.5 percent in April from the previous month, a second consecutive monthly gain, the trade ministry said.

Year-on-year, output was up 3.8 percent. The month-on-month figure was slightly lower than expected but in line with the market view that Japan's economy is on a slow but steady recovery path, analysts said.

"On the whole, the latest indicators show that the Japanese economy is on the right track to recovery," said BNP Paribas economist Yoshimasa Maruyama.

The ministry forecast that production will rise 0.2 percent in May from April and gain a further 1.3 percent in June, based on a survey of manufacturers' own expectations.

"The forecast of industrial output shows that, at least until the second quarter of this year to June, the country will see robust production," said Maruyama.

Yasuo Yamamoto, senior economist at the Mizuho Research Institute, said companies appeared to have finished the process of drawing down stockpiles of electronic devices which had been hindering the economic recovery.

"In the labor market, the jobs-to-applicants ratio also recovered in April," added Yamamoto.

The job-offers-to-seekers ratio improved to 1.04 from 1.01 in March, meaning that there were 104 job openings last month per 100 job seekers, the Ministry of Health, Labor and Welfare said.

With the world's second largest economy finally breaking out of the deflation doldrums, financial markets expect the Bank of Japan (BoJ) to soon scrap zero interest rates.