Japan's Jobless Rate Rises in April
The April jobless rate rose to 4.8 percent from 4.7 percent in the previous month, nearing Japan's post-war high of 4.9 percent in January and December, AFP quoted the Public Management Ministry as saying.
The number of unemployed increased 20,000 during the month to 3.48 million, marking the first rise in three months.
Finance Minister Masajuro Shiokawa was at a loss to predict the start of an economic recovery, and government officials acknowledged the situation would not improve anytime soon.
"Looking at the April jobless rate, I think the economic situation is serious," Shiokawa told a regular news conference.
"Government deregulation is helping the private sector to expand business but I do not know when the economy will begin improving," the 79-year-old minister said.
A ministry official said: "Under the current economic situation, the jobless rate will stay around this level for a while."
Satoru Ogasawara, senior economist at Credit Suisse First Boston, warned the jobless rate could easily top five percent due to ongoing corporate restructuring and banks' bad loan write-off efforts.
"The jobless rate will get worse in the months to come as companies are cutting jobs and banks are gearing up their efforts to write off bad loans by stopping loans to loss-making companies," Ogasawara said.
Adding to further pressure on the economy, the ministry said spending by salary-earning households in April dropped 4.4 percent year-on-year after rising 1.0 percent in March.
The April spending figure marked the first fall in five months and the scale of the decline was the biggest since December 1999, it said. Overall monthly income fell 0.5 percent to an average of 498,869 yen ($4,100).
"Spending is not improving. We are in a severe situation," a ministry official said.
Salary-earning households account for about 60 percent of Japan's total household spending, the ministry said.