New figures fuel Japan's economic gloom

New data about Japan’s economy today offered a sobering reminder of the country’s fragile recovery: the jobless rate rose, deflation deepened, and industrial production fell unexpectedly.

The country’s jobless rate rose to 5.3%, up for the fourth consecutive month and hitting its highest level since November.

The actual number of jobless fell 1.1% from the previous year to 3.44 million, according to the Ministry of Internal Affairs and Communications. Those with jobs fell 0.3% to 62.8 million.

Meanwhile, industrial production retreated 1.5% in June from the previous month as factories reduced output of large passenger cars and mobile phones. It was the first fall in fourth months and undershot Kyodo news agency’s market forecast for a flat reading.

“Industrial production continues to show an upward movement although it has been pausing temporarily in part,” the Ministry of Trade, Economy and Industry said in its report.

Companies surveyed by the ministry expect factory output to fall 0.2% in July, then climb 2% in August.

Deflation persisted as Japan’s core consumer price index, which excludes fresh food, fell 1% from a year earlier in the 16th consecutive month of decline.

The government’s new high school tuition breaks weighed heavily on prices, dragging education costs down 13%.

The data highlights ongoing weaknesses in the world’s second largest economy even as Japanese companies report stellar quarterly earnings. Thanks to strong overseas demand, major Japanese companies including Sony and Panasonic rebounded back to profits in the April-June period.

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