Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. Core prices started rising in October after declining for eight months. They have either hovered near zero or or been falling since March 1998, when an increase in sales tax pushed gains to 1.8 percent, and the country into recession. According to the "core-core" index - excluding energy as well as food - Japan's consumer prices fell 0.1 percent in February. On this measure Japan is still stuck in deflation, with prices having failed to rise in over nine years.
The jobless rate climbed to 3.9 percent, the highest since last October, and job vacancies fell to a two-year low. The ratio of jobs available to each applicant slid to 0.97, the lowest since September 2005.
As much as rising unemployment, Japan's deteriorating labour market conditions are finding reflection in a steady trickly of people being discouraged and leaving the labour force, which has fallen steadily in recent months:
The number of Japanese who are employed has also been falling, giving us another measure of the way the economy is decelerating:
This combination of higher unemployment and faster inflation will undoubtedly complicate life a little over at the Bank of Japan, but there can be little doubt that the next move in interest rates will be down, and it may not be long in coming.
Household spending was effectively stationary on a year on year basis last last month, according to data from the Japanese statistics bureau. The average monthly consumption expenditures per household for households of two or more persons was 275,827 yen in February, up 1.1% in nominal terms and unchanged in real terms from February 2007.
If we look at worker households, The average monthly income per household stood at 476,282 yen, up 1.0% in nominal terms but down 0.1% in real terms from the previous year. Consumption expenditures was 298,539 yen, up 2.5% in nominal terms and up 1.4% in real terms over February 2007.
