Japan’s Unemployment Rate Rises Surprisingly

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According to data released by the Japanese Ministry of Internal Affairs and Communications, on Tuesday, the number of unemployed increased in the month of December, and stood at 4.6%, up from 4.5% in November. Compared to the 4.5 percent median forecast by economists, the seasonally adjusted unemployment rate in December was higher. For the full year 2011, the unemployment rate was at 4.5 percent, which was a fall of 0.5 percent from the previous year. The annual data may not be truly representative of the ground situation, because, the prefectures of Iwate, Miyagi and Fukushima, which were hardest hit by the March 11 earthquake and tsunami, were excluded from the annual survey, due to the difficulty in compiling data there.

December marked the first rise in jobless rate since October, when it rose to 4.5% from 4.1% in September. Compared to November, last month saw a fall in the number of pay-roll jobs by 30,000 to a seasonally adjusted 62.46 million. Men were worse off, and their jobless rate rose to 5 per cent from 4.8 per cent in November while the rate was down for women at 4 percent from 4.1 per cent the previous month. The jobs-to-applicants ratio was at its highest since November 2008, and stood at 0.71. The ratio of job offers per job seeker climbed to 0.65 over the year of 2011, from 0.52 in 2010.

Over the past year, the Japanese economy has been hit by a series of unfortunate incidents, the most prominent being the March disaster that left thousands dead, and triggered the Fukushima nuclear crisis.  There was massive disruption in electricity supply throughout the country and nuclear reactors were shut-off, which led to severe power crisis. The government, in an attempt to stoke demand and rebuild the economy, has approved four supplementary budgets worth about 20 trillion yen ($262 billion). According to the Ministry of Economy, Trade and Industry, there are signs that the huge capital infusion by the government has led to some revival.  Factory output, largely due to the contributions of the automotive and electronics sector, rose in December by 4%, from a month earlier. Household spending also saw a rise for the second straight month.  But the strong yen, which makes Japanese products more expensive abroad and eats away at repatriated profits, is a matter of concern for exporters. On the back of increased fossil fuel imports, last weekJapanannounced its first annual trade deficit for more than 30 years.

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