May - unemployment rises as output slows

Japan's unemployment rate rose unexpectedly in May as household consumption fell and factory production declined, illustrating the fragile nature of Japan's gradual recovery from recession.

The unemployment rate edged higher in May to 5.2 percent, rising by 0.1 percentage points from the previous month, government data showed Tuesday.

The rate fell below market expectations of 5.0 percent forecast by economists surveyed by Dow Jones Newswires.

It was the 28th consecutive monthly decline in the number of people in employment, the government said, with the workforce now standing 470,000 lower than a year earlier.

Average household consumption also fell unexpectedly in May by 0.7 percent on-year, the government said, defying expectations of a 0.5 percent rise as weak domestic demand continues to burden the Japanese economy.

Crippling deflation, and weak domestic demand continue to weigh on growth as consumers defer purchases in the hope of further price falls. The government has said it aims to end deflation by fiscal 2011.

Factory output was down 0.1 percent on month in May, the first drop in three months following a 1.3 percent gain in April.

The latest data may raise concerns about Japan's output growth in the months ahead, given a recent slowdown in export growth amid anxieties over both the impact of global stimulus withdrawal and European debt on exports.

http://news.yahoo.com/s/afp/20100629/bs_afp/japaneconomy_20100629012551

Jobless Using Capsule Hotels as Accomodation

A report from the Scotsman describes how out of work Japanese are using capsule hotels as a form of accomodation.

During Japan's boom times, the capsule hotels were a popular choice for salarymen in the large urban centres, who had missed the last train home and couldnt afford the cabfare home. However, over the last few years, corporate entertainment has dried up and with it the market for the capsule hotel operators.

Now, these operations have re-invented themselves as budget accomodation for the unemployed and provide discounted rates for monthly or longer stays.

http://news.scotsman.com/world/Home-is---a.6008912.jp