Cautious Japanese companies laid off more workers and hit the brakes on production last month, sending factory output down for the first time in a year.
Industrial production in the world’s second-biggest economy retreated 0.9 percent from January, following 11 consecutive months of gains, the government said yesterday. The result missed Kyodo News agency’s average market forecast of a 0.4 percent decline.
A separate report showed Japan’s unemployment rate was unchanged at 4.9 percent last month. The number of jobless rose 8.4 percent from a year earlier, however, to 3.24 million, with 1.1 million saying they were laid off. The number of people with employment fell 1.3 percent to 61.85 million.
Last month’s output lull is expected to be temporary. The Lunar New Year holidays during the month lowered demand across Asia, and a surprisingly robust 2.7 percent jump in January pointed toward an inevitable downturn in the following month.
The government predicts industrial production will climb 1.4 percent this month as strengthening export demand in key markets such as China and the US underpins the country’s economic recovery.
Still, the latest numbers offer a less than inspiring picture of Japan’s economic health. While production overall is still trending higher, economists question whether improvements can be sustained and translate into stronger job and wage growth.
“The pace of improvement in overseas demand may not be sustainable, and we note that firms are cautious in their behavior,” Goldman Sachs economist Chiwoong Lee said in a note to clients. “These are not fertile conditions for a strong labor market revival.”
The ratio of job offers to job seekers stood at a seasonally adjusted 0.47 last month, up from 0.46 last month, a labor ministry report also showed yesterday. That means there were 47 positions available for every 100 job seekers.
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