Drop in GDP Returns Japan to Recession

Japan slid back into recession for the third time in a decade, as record unemployment damped consumer spending and a global slowdown sapped exports.

Gross domestic product shrank 0.5% in the third quarter, the government said, led by a 1.7% drop in consumer spending.

While that was in line with expectations, the second-quarter decline was revised to 1.2% from an initial 0.7% contraction.

The economic news came as Aoki Corp., a general contractor, joined the growing list of companies filing for bankruptcy, and Matsushita Electric Industrial Co. said it will shed 10,000 workers, 2,000 more than initially planned.

Japan’s return to recession comes barely two years after the nation emerged from its last period of contraction.

The world’s three biggest economies are shrinking simultaneously for the first time since 1974. The U.S. economy contracted at a 1.1% rate in the third quarter, deepening a recession that started in March, and Germany is expected to fall into recession later this year.