Japan’s Jobless Rate Hits 4.4%, Matching U.S.’

Japan said its unemployment rate rose to a postwar record of 4.4% in November, equaling the U.S. jobless rate for the first time.

The jobs-to-applicant ratio, meanwhile, fell to a record low 0.47, meaning there were 47 jobs posted at Japanese government-run job agencies for every 100 applicants.

Economists polled in a Bloomberg News survey had expected the jobless rate to remain at 4.3%. The number of unemployed rose to 2.9 million in November, a rise of 28% from the same month last year, according to the Management and Coordination Agency.

Japan’s unemployment is increasing as smaller companies go bankrupt and large companies hire fewer workers and encourage early retirement because consumers, concerned about jobs, prefer to save rather than spend. Yet, unless consumers open their wallets, corporate profits will continue to suffer, leading to further job cuts.

Government efforts to break this cycle and pull the world’s second-largest economy out of recession, including a $207-billion economic stimulus package announced in November, are not expected to create new jobs immediately.

“The unemployment rate will rise for the time being,” said Taichi Sakaiya, head of the Economic Planning Agency. “But I expect it to fall next year resulting in an average of 4.3% for the year [through March 2000].”

The International Monetary Fund said in a report released in Washington on Monday that it expects unemployment in Japan to average 4.9% in 1999.

Several major Japanese companies plan to reduce their work forces over the next few years.

Large companies in Japan generally reduce excess labor by hiring fewer university graduates and offering early retirement packages to older employees.

Of the 2.9 million unemployed in Japan in November, 800,000 were between ages 24 and 34, and 550,000 were 55 to 64.