Japan's jobless rate falls to 9-year low 2 hours, 23 minutes ago

Japan's jobless rate falls to 9-year low 2 hours, 23 minutes ago



TOKYO - Japan's jobless rate fell to its lowest in more than nine years and household spending inched up in June, the government said Tuesday, a pair of numbers that could help the Bank of Japan make the case for raising interest rates next month.

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The unemployment rate dropped to 3.7 percent in June from 3.8 percent in May, said the Ministry of Internal Affairs and Communications. That's the lowest since 3.6 percent in February 1998.

Separately, the ministry said overall household spending in the world's No. 2 economy rose 0.1 percent in June in real terms from a year earlier, suggesting consumer spending is slowly but steadily increasing.

The result was the six straight monthly increase, though it was smaller than economists forecast of a 0.7 percent gain.

"The economy's recovery trend is firm," Japan's Economy Minister Hiroko Ota said.

Recent signs of strength in Japan's economy has prompted speculation that the Bank of Japan may raise interest rates to 0.75 percent from 0.5 percent at its Aug. 22-23 policy meeting.

But Ota also cautioned against too much optimism over the state of the economy, noting a lack of improvement in consumer prices.

"The end of deflation is in sight, but (the economy) has yet to escape from it completely," she said.

Data released Friday showed that the core index of consumer prices, excluding fresh food prices, fell 0.1 in June from a year earlier, the fifth monthly drop.

The unemployment report on Tuesday said the total number of jobless fell for the 19th straight month, decreasing by 370,000 from the same month a year ago to 2.41 million. The number of job holders rose by 530,000 to 64.91 million, the ministry said.