Japan’s Jobless Rate Hits a Postwar High

Japan’s unemployment rate soared to a postwar record of 4.6% in February and the number of people looking for work in the struggling economy hit a historic 3 million, the government said today.

The jobless rate rose sharply from the previous month’s 4.4%, which had stood as a record for three straight months, the Management and Coordination Agency said.

The sour figures come as Japan is battling its deepest recession in 50 years. The government has pumped billions of dollars into the economy in an all-out campaign to get wary consumers to spend.

“The unemployment situation is still harsh, but the most important thing for the improvement of that situation is to put the economy back on track,” said Chief Cabinet Secretary Hiromu Nonaka.

The number of people without jobs rose by 670,000 from February 1998 to 3.13 million--the most since the agency began recording the data in 1953.

Rising joblessness comes as many companies fighting to regain competitiveness are restructuring by trimming payrolls, selling off subsidiaries and closing offices.

The total number of jobholders shrank by 770,000 from a year earlier to 63.34 million, the agency said. It was the largest-ever decrease in the number of jobholders and marked the 13th consecutive month of declines.

The new jobless rate is the latest in a long string of dour economic announcements in Japan.

The government said earlier this month that the economy shrank 0.8% in the last three months of 1998--the fifth quarter in a row that the economy has failed to grow.

That figure put Japan’s economy on track to shrink 3.2% in the 1998-99 fiscal year if the pace continues--the first time it would have shrunk for two fiscal years in a row since the end of World War II.

To fight the recession, the government has earmarked a mammoth $682.5 billion in the budget for the new fiscal year, starting April 1, for public works spending, tax cuts and other stimulus measures.

Officials are also spending $62.5 billion to bail out the country’s troubled banks, which are saddled with bad debt from the collapse of the speculative bubble in the early 1990s.

Despite the disheartening numbers, many in Japan are saying the economy has hit bottom and should be on the mend over the next couple of years.

The Nihon Keizai newspaper just published a survey of 112 company presidents, showing that nearly 90% believe a turnaround should come before the end of 1999. The government said one factor behind the rise in the jobless rate was a growing number of women, including homemakers, searching for employment.