Japan's Jobless Rate Falls In August; Consumer Spending Rises

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Japan's jobless rate edged down in August, after hitting a record high in July, an official report showed Friday, raising hopes that sustained recovery in the world's second largest economy may be well on track. Moreover, consumer spending also increased in August, after falling in July.

Data released by the Ministry of Internal Affairs and Communications showed Friday that the jobless rate decreased to 5.5% in August, on a seasonally adjusted basis, from a record high of 5.7% in July. Moreover, the rate came in below economists' expectations for 5.8%.

Even as the jobless rate decreased, the absolute number of unemployed persons showed an increase in August. The number of unemployed increased to 3.61 million from 3.59 million in July. At the same time, the number of employed persons rose to 62.9 million from 62.7 million. The labor force grew to 66.5 million from 66.2 million, and the participation rate also climbed to 60.2% from 60%.

In a separate report, the Ministry indicated that the household consumer spending rose 2.6% year-on-year in August, reversing a 2.2% fall in the preceding month. The increase was in contrast to economists' expectations for a 0.2% drop.

Economists and policy makers are generally of the view that the Japanese economy is already on track for a sustained recovery, with growth likely to be seen in coming quarters. While raising the global growth forecast on Thursday, the International Monetary Fund said the economy could expand 1.7% next year, reversing an estimated 5.4% contraction this year.

In its latest World Economic Outlook, the lender upgraded the economic forecast for the global economy citing robust performance in Asian economies. The IMF expects the global economy to grow at a pace of 3.1% next year, faster than the 2.5% estimated in July. Moreover, it revised down the economic contraction for 2009 to 1.1% from 1.4%.

Elsewhere on Friday, the Bank of Japan said the monetary base rose 4.5% year-on-year in September to 92.39 trillion yen, following a 6.1% rise in August. Seasonally adjusted, the monetary base was down 11.9% in September.

Japan's jobless rate edged down in August, after hitting a record high in July, an official report showed Friday, raising hopes that sustained recovery in the world's second largest economy may be well on track. Moreover, consumer spending also increased in August, after falling in July. (Market News Provided by RTTNews)