The Job Market: A View from The Big Game Hunter, Jeff Altman

Labels: automakers, Japan, layoffs

HE September quarter, in which Japan almost certainly entered a technical recession, closed with news of the sharpest monthly decline in industrial production in seven years and worse than expected employment and household spending numbers.

"It is becoming almost consensus that the country's economy is entering a recessionary phase," said Daiwa Securities SMBC senior economist Maiko Noguchi.

"Now the focus is on the depth and the length of the phase."

The first official September quarter GDP estimates, still seven weeks away, are likely to show a second successive sharp contraction in the world's second-largest national economy, following Japan's 3 per cent annualised fall in the June quarter.

All the main August data released was significantly worse than market forecasts, painting the picture of an economy now gripped both by the slump in export demand beyond Asia and domestic demand now in fast retreat.

Japan's industrial output fell 3.5 per cent in August on the month previously, compared with the market consensus forecast of 2.9 per cent, mainlyreflecting severe demand conditions in US and European markets.

Japan last week reported a Y324 billion ($3.8 billion) merchandise trade deficit for August, the first in 26 years excluding Januaries (when exports slow seasonally). Export revenues from the US fell almost 22 per cent year on year and from the European Union by 3.5 per cent.

Although the Economy Trade and Industry Ministry's survey of manufacturers suggests a mild rebound in September, industrial output is now expected to have fallen for three successive quarters, the first time that has happened since 2001, during Japan's last recession.

The wilting of domestic demand -- never strong throughout the 2002-07 recovery cycle -- looks to be equally pronounced, on the latest household spending and employment data.

Price-adjusted monthly household spending in August fell 4 per cent, year on year, compared with the 1.3 per cent market forecast. This is an important component of domestic private consumption, which accounts for about 55 per cent of Japanese GDP.

Except for transport and communication, household spending fell in all sectors, including food where prices have been rising sharply. Average monthly household wages, however, rose slightly.

The evidence that Japanese consumers are pre-emptively tightening their belts makes the employment numbers a cause for growing concern, because they show domestic employers also cutting back on new hiring.

Headline unemployment in August reached 4.2 per cent seasonally and though it represented only a slight rise on the previous month, it was a two-year high.

More strikingly, the jobs-to-applicants ratio fell sharply again to 0.86 (100 applicants available for 86 jobs). Six months previously, the ratio was 0.95 and last year the ratio was usually above 1.

"The impact of (the) worsening economy is gradually spreading to the jobs market," Shinkin Central bank Research Institute senior economist Takumi Tsunoda told Reuters.

"Until recently, companies have been mainly cutting part-time jobs, but now they are also reducing full-time employees."

Labels: employment, Japan

Layoffs have begun. Instead of calling them layoffs, companies give employees 'no assignments'. Left with nothing to do, employees come to the office and find that their telephones and computers have been removed. It is quite obvious to everyone in the office which employees are no longer deemed necessary. This subtle form of 'non-verbal communication' is very effective. It is far easier for company management to send an employee adrift without a life preserver than to sit down with them and tell them to 'hit the road'.

I think it is time for the voters to throw out the current government and let Ozawa and his crew an opportunity to run the country. Let's prat that the next government can find its way through its own BS and turn around the economy and restore Japan's education system and social welfare system.

Labels: Japan, layoffs

By Earnest Cavalli EmailFebruary 08, 2008 | 4:43:05

Amid news that Sega Sammy Holdings expects to lose 26 billion yen ($243.9 million) during this fiscal year, the firm announced that they will be cutting 400 jobs from their videogame software group.

This sad news comes on the heels of a plan the company revealed in November to close or sell 80 of the group's 430 worldwide arcades.

Company executives see heavy Japanese regulation of the gambling uses for their pachinko systems (leading to an 85 percent profit decline for that section of the company), as well as the proliferation of the Wii (which gives gamers the ability to play many popular Sega arcade games at home) as key factors in their current financial woes.

The ongoing collapse of the traditional arcade makes this news not-so-surprising, but many were still stunned by the Japanese government's decision to crack down on the pachinko industry.

Certainly, it's a form of gambling, but with annual revenues of 30 trillion yen ($281 billion), you'd think they'd be willing to continue to look the other way, if not actively subsidize an industry which generates great, continuous economic windfalls for the nation.

I don't think the arcade will ever truly die, if only because there are so many frighteningly devoted Dance Dance Revolution fans out there, but this news is yet another kick to the ribs of the traditional arcade's badly beaten body.

Sega Sammy sees loss in 2007/08 [Reuters]

Labels: Japan, layoffs, Sega Sammy

TOKYO (AP) — Japan issued mixed economic data Tuesday in government figures for jobs, spending and sales in December, and officials responded cautiously amid other signs economic growth is slowing.

Though household spending rose, beating expectations, growth in retail sales was more sluggish and the jobless rate showed no improvement.

"Japan's economy is slowing for now," Bank of Japan Gov. Toshihiko Fukui said in parliamentary testimony, repeating the same assessment his institution issued last week.

Economy Minister Hiroko Ota, meanwhile, said Japan's economy remains on a solid footing. But she stressed the need to monitor the U.S. economy — a major export market — and any moves by Washington and the U.S. Federal Reserve, whose interest rate-setting body meets later this week.
Household spending, Tuesday's brightest spot, rose 2.2 percent in December from the same period the previous year, the Ministry of Internal Affairs and Communications said. That figure beat forecasts for a 0.2 percent decline and marked the first rise in two months.
The data suggest consumers, despite sluggish wage growth and higher energy costs, are still spending at stable levels. But analysts say risks that consumption could fall by a large margin are increasing.

The retail sales data seemed to back up that view, rising just 0.2 percent in December from a year earlier, according to the Ministry of Economy, Trade and Industry. It was still the fifth straight month of increase, and came as consumer prices rose their most in nearly a decade in December.

Japan's jobless rate was flat in December for a second month running at 3.8 percent, the Internal Affairs Ministry said. The figure beat the 3.9 percent forecast of economists surveyed by Dow Jones Newswires and the Nikkei.

The government remains bullish but cautious about conditions in the country's job market, Ota, the economy minister, told reporters after a regular Cabinet meeting.

"We haven't changed our views on the employment situation," she said. The labor market "continues improving, but its pace is slow."

The jobless rate dropped to 3.8 percent in November after registering 4.0 percent in both September and October. Analysts say the improvement pace of the employment figures may slow down ahead.

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For the full year, Japan's unemployment rate fell below the 4-percent mark for the first time since 1997, dropping to 3.9 percent, the internal affairs ministry said. That marked the fifth year in a row the figure fell, it said.

The data released Tuesday came amid other concerns about Japan's growth outlook, reflecting in part global economic uncertainties and looming fears of a possible recession in the U.S.
The economy grew at a slower pace than originally thought in the third quarter — expanding at a 1.5 percent rate instead of an earlier reported 2.6 percent — due to a downward revision in corporate capital investment.

Also, sentiment for the country's economic outlook at major companies fell to a two-year low in December in the Bank of Japan's quarterly "tankan" survey of corporate executives.

Labels: employment data, Japan

Labels: Australia, Germany, India, Japan, Manpower Employment OutlooAustralia, Sweden, urvey

Labels: Japan, unemployment

TOKYO -
Japan said the economic recovery that began in 2002 is still holding up, but warned the gap between the rich and poor may be widening, according to an annual report released Tuesday.

Separately, in a monthly report, Japan upgraded its assessment of employment for the first time since June 2005, increasing the chances that the Bank of Japan will raise interest rates soon.

Japan's jobless rate stood at 3.7 percent in June, its lowest level since February 1998, while workers' average monthly income fell 1.1 percent on year during the same month, according to recent government data.

The annual "white paper" on the economy said restructuring efforts after the burst of the "bubble" in the early 1990s have put the economy in its longest period of growth since the end of World War II.

But the gap between the rich and the poor is starting to grow, as it did in the 1980s in the U.S., the Cabinet Office said.

The report on the economy for August said exports were up moderately, the first time the government was more upbeat about exports in 16 months.

It said imports were decreasing moderately as well, the first time in 11 months it has issued a lower appraisal on imports.

Consumer spending is picking up, the monthly report said, although the government also kept a cautious view on future consumer spending because of concerns about the "sluggish" growth in wages.

The corporate sector was healthy, it said.

Economy Minister Hiroko Ota said the world's second-largest economy remains on a recovery path, brushing off concerns about weakness in factory output.

"The latest data have backed that up," Ota told reporters about her view. "We have held on to the view that there's no change in the trend of the economy."

Labels: employment, Japan