The ratio of job offers available for each applicant slipped to 0.91, the lowest since February 2005. As compared with June 2007 there were 400,000 less people employed in June 2008. This last data`point is, perhaps, the clearest indicator of the deteriorating job market in Japan.
Spending by Japanese households also fell by 1.8 percent year on year in real terms - to an average 281,951 yen ($2,624.30) - in June. The most significant declines were in spending on housing renovations, clothing and food, according to the Ministry of Internal Affairs and Communications press release.
This was the fourth straight month of decline and followed a 3.2 percent drop
in May. The overall household income also fell 2.1 percent, with the income of
household heads down 4.1 percent. Extraordinary income - basically bonuses - fell
7.1 percent in June from a year earlier.
Before adjustment for inflation retail sales rose 0.3 percent in June from June 2007 as consumers found themselves having to pay more for petrol and food. When adjusted for inflation, sales slumped 3.3 percent, again the fourth consecutive monthly decline.
The Bank of Japan cut its assessment of the economy this month, stating that the economy was slowing "further" because of weak business investment and consumer spending. I think what we now need to see is the July export and industrial production data, and then we can more or less decide whether this is simply a one quarter contraction (Q2) or a full-blown recession with the contraction extending into Q3.
