The national unemployment rate stood at a near-record 5.4 percent for the third straight month in May, suggesting the deflation-stricken economy is weighing heavily on the job market.
The numbers released Friday by the Labor Force Statistics Office show that 3.75 million people were out of work in May, unchanged from a year ago.
“We can say conditions are holding steady,” ministry official Michio Matsumura said. “We must closely watch what develops, including changes in the overall economy.”
About one-third of the jobless ranks — 1.04 million people — are the heads of households, underlining the serious labor woes that have troubled the country for the last two years.
Having been mired in a slowdown for more than 10 years, the world’s second-largest economy barely expanded at all in the first three months of this year.
Friday’s data suggest that manufacturing redundancies seem to be trailing off, although employment is fluctuating in the service sector, the one area in which Japan anticipates growth.
Last August, the unemployment rate hit 5.5 percent, the highest ever. The government began keeping records in 1953.
After easing to 5.4 percent in September, joblessness climbed back to 5.5 percent in October. It reached this level again in January before dipping to 5.2 percent in February. It edged back to 5.4 percent in March and April.
Seiji Adachi, an economist at Credit Suisse First Boston, said the outlook for labor market conditions remains grim, with companies facing pressure to trim their workforces to secure profits in a tough business environment.
“Companies continue to face pressure for restructuring efforts,” Adachi said. “I believe the unemployment rate will rise again toward the end of the year, possibly from around July.”
The ratio of job offers to job seekers rose 0.01 percentage point to a seasonally adjusted 0.61 in May, meaning that 61 jobs were available for every 100 job seekers, the Health, Labor and Welfare Ministry said in a separate report.
Job offers rose 0.8 percent from April, with the number of job seekers falling 0.2 percent.
The number of new job offers rose 8.2 percent from a year earlier, the ministry said.
Japan is unique among industrialized powers in terms of suffering protracted deflation, a steady decline in prices that paralyzes the economy by chipping away at corporate profits and individual incomes.
Although the Bank of Japan has repeatedly slashed interest rates to virtually zero in an effort to spur growth, deflation has dragged on. Excess cash in the financial system has not led to dynamic private-sector investment or consumer spending.
Some firms have reported improved profits recently on the back of cost cuts and strategy shifts. Much depends, however, on the prospects for recovery in the United States.
A solid U.S. rebound this year will lift Japan’s chances to export its way back to growth.
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