Japan’s jobless rate has reached a new low in four years, as it dropped to 3.9% in June. The survey by the Ministry of Internal Affairs showed that it fell from 4.1% in May, which was the best recorded reading since October 2008. This was a better figure than the forecasts of economists who expected it to remain at 4.1%.
However, Japan’s industrial output fell 3.3% on-month in June, which is sharper than what was expected by analysts. A survey of economists were predicting a 1.7% drop but the actual figures showed that Prime Minister Shinzo Abe’s administration still has a lot of challenges to face to jumpstart the country’s stagnant economy. The Ministry of Economy, Trade and Industry said it was 4.8% lower than a year ago despite all the economic measures implemented by the government. Household spending was also down .4% from a year ago even as consumer prices went up for the first time since last year. Prices for desktop computers, imported ground meat, canned fish and utilities like electricity and gas rose. Other food categories also increased their prices as well. But a lot of consumer good prices also fell, like DVD players and digital cameras.
These latest data brings into question whether or not to pursue the sales tax increase which is scheduled for April 2014. Economists say an increase might damage the progress Japan has made in restoring growth and breaking the deflation trend. Abe has also said he might consider amending the 3% increase to 8%, depending on the economic performance for the rest of the year.
[ via Newser ]
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