Japan's industrial output plunges, Unemployment increases
Japan, world's second biggest economy, is slowly plunging into recession. After exports declined historic low now Industrial output in Japan dropped just over 8% in November compared with the previous month, the biggest fall on record. Worse is that along with output decline number of unemployment has started increasing. Unemployment rose to nearly 4% of the population.
Output at the nation’s vital manufacturers fell 8.1% from October, the largest drop since Tokyo began measuring such data in 1953, as Japan’s automakers and others slashed output to cope with slowing global demand. The decline was worse than analysts’ forecasts, and a survey predicted a similar 8% decline in December.
“Exports and industrial production are falling so extraordinarily quickly that it almost defies analysis,” said Richard Jerram, chief economist at Macquarie Securities in Tokyo.
The monthly drop in factory production is nearly double the previous record fall of 4.3% in January 2001, according to the Ministry of Economy, Trade and Industry. Earlier this week, trade data showed that Japanese exports plunged a record 26.7% in November.
Many companies, including big names like Toyota Motor Corp and Sony Corp, have announced plans to cut production and workers. The yen’s recent strength against the dollar and euro has also dealt a huge blow to this export-oriented economy—the world’s second-largest—by eroding overseas earnings.
The job cuts are already being reflected in a higher unemployment rate, which rose to 3.9% in November from 3.7% in October, the Ministry of Health, Labor and Welfare said. The figure does not include those who have given up looking for work and exited the labor market entirely.
The ministry said 2.56 million people were unemployed in Japan in November, an increase of 100,000 from a year earlier.
Consumers are also holding back. Retail sales fell 0.9% in November from last year, the third straight monthly decline.
And average monthly household spending dipped 0.5% in November from a year earlier, for the ninth straight monthly decline. Still, the drop was smaller than expected, beating the 3.6% decline forecast by a Kyodo News survey. Household spending is a key indicator of consumer spending, which makes up more than half of Japan’s gross domestic product.