Japan’s contracting economy was hit by more bad news yesterday when figures showed that industrial production plunged by its biggest margin ever last month, the jobless rate jumped and household spending fell.
Output at the nation’s vital manufacturers fell 8.1 percent 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 percent decline this month.
“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 percent in January 2001, the Ministry of Economy, Trade and Industry said. Earlier this week, trade data showed that Japanese exports plunged a record 26.7 percent last month.
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 US dollar and euro has also dealt a huge blow to the 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 percent last month from 3.7 percent 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 last month, an increase of 100,000 from a year earlier.
Consumers are also holding back. Retail sales fell 0.9 percent last month from last year, the third straight monthly decline.
And average monthly household spending dipped 0.5 percent last month from a year earlier, the ninth straight monthly decline. Still, the drop was smaller than expected, beating the 3.6 percent 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 GDP.
Inflation, meanwhile, eased. Core consumer prices — which excludes volatile fresh food prices — rose 1 percent after a 1.9 increase in October.