Japan's jobless total rises to seven-year high: Figures still better than those of rivals

UNEMPLOYMENT in Japan reached a seven-year high last month, but at 3 per cent of the workforce it remains well below the rates in Britain and other industrialised countries, according to official figures released by the Management and Co-ordination Agency.

About 1.88 million people were unemployed in Japan last month, nearly 20 per cent more than in the same month a year earlier and up 50,000 on the previous month after adjusting for normal seasonal influences.

The jobless rate stands just below the 3.1 per cent record reached in 1987, when the economy was under pressure from a high yen. The rate would be higher if calculated on the same basis as the British figures, for example, because anyone in Japan working more than an hour in the last week of the month is counted as working.

Relatively large numbers of Japanese are either employed by firms who do not need them or do not seek work because they believe jobs are not available.

'It is certain that the economy is heading towards recovery, but the unemployment rate is a lagging indicator and moves behind the actual economy,' said Kozo Igarashi, the chief cabinet secretary. 'For the time being, severe conditions are expected to continue.'

The rise in unemployment is a lingering effect of Japan's worst recession since the Second World War. The government said last week that company investment remained subdued, although consumer spending was increasing.

Tokyo analysts expect unemployment to top its 1987 record level in the next few months. Employment in Japan fell by 40,000 in July to 65.16 million.

The widely watched jobs-to-applicants ratio also showed that demand for workers was depressed, with the number of job offers for every 100 applicants falling from 63 in June to 62 in July. The government said it was not clear whether the unemployment rate was rising or coming to a peak.

'The jobless rate has been hovering at a high level since late last year. We still need vigilance,' a Management and Co-ordination Agency official said.

Separate figures from Japan's car-making federation showed that motor vehicle exports in July were 0.3 per cent higher than a year earlier at 405,578. This was the first rise since the year to March 1993. Exports rose almost 8 per cent between June and July alone. Exports to the US jumped 25.4 per cent from the level a year earlier to 169,832, the fourth month running to record a rise.