Japan’s Consumer Sentiment Stays Near Record Low on Job Cuts
Japan’s consumer sentiment stayed near its lowest level in at least 26 years in January, indicating households are likely to keep cutting spending.
The confidence index rose to 26.4 last month from 26.2 in December, the lowest since the government began compiling the figures in 1982, the Cabinet Office said today in Tokyo.
The worst deterioration in job prospects in four decades is prompting consumers in the world’s second-largest economy to cut spending. Japan’s recession may be the worst in 50 years, the Bank of Japan’s chief economist said yesterday.
“Households are increasingly concerned about job security and income,” said Yoshiki Shinke, a senior economist at Dai- Ichi Life Research Institute in Tokyo. “Given the deterioration in the job market and wages, consumer spending will probably be another factor that will deepen the recession.”
A report on Feb. 16 will probably show the economy contracted at an annual 11.7 percent pace in the fourth quarter, the biggest drop since 1974, according to economists surveyed by Bloomberg News guaranteed payday loan.
“Japan’s recent economic decline is faster than that of the U.S., which has been experiencing the worst financial crisis in a century,” Kazuo Momma, head of research and statistics at the central bank, said in a speech in Tokyo yesterday.
The jobless rate jumped to 4.4 percent in December from 3.9 percent, the biggest monthly advance in 41 years, and wages had their biggest drop in a year as companies cut output at an unprecedented pace.
Forecasting Losses
Panasonic Corp., Hitachi Ltd. and NEC Corp. — all of which are forecasting losses for the current fiscal year — have announced a combined 39,000 job cuts in the past two weeks.
Overtime working hours at manufacturers dropped the most since the survey began in 1990 in December, contributing to a second monthly drop in wages, according to Labor Ministry. Households pared spending for a 10th month in December.
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