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Japanese Unemployment Rate Returns to Post-War High - 2002-11-29

The latest economic data from Japan suggests the economic recovery may be ending. Japan's unemployment rate for October rose to 5.5 percent from 5.4 percent the previous month. The jobless rate matches the record high set in December 2001.

Economists say the numbers reflect severe business conditions and corporate restructuring, including job cuts.

Labor Minister Chikara Sakaguchi tells reporters that, while the number of unemployed is rising, more jobs are available. He believes there is a mismatch between job seekers and the types of jobs now available and says he is determined to work on easing the situation.

Japanese industrial production dropped in October, falling three-tenths of one percent from a month earlier. The drop was larger than expected, and is prompting some economists to predict that the economy will contract in the fourth quarter of the year.

Consumer spending in Japan remains weak. Retail sales fell 2.8 percent in October, down for the 19th straight month amid lingering deflation. Unseasonably warm temperatures hurt the sales of items such as winter clothing and electric heaters.

Fierce competition forces the country's two largest video game makers to consolidate. Square and Enix agreed to merge next April in a deal worth nearly $730 million.

The pact is the first among Japanese makers of game software and could create hurdles for rival Microsoft as it tries to expand in Japan.

The game companies say rapid changes in computer technology required to make computer games has raised production costs, and the merger will allow them to stay at the forefront of game development.