Japan’s consumer prices, spending fall amid recession

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Japan’s consumer prices fell 0.1 per cent from a year earlier in October, dropping for a third consecutive month, as the country tried to make its way out a second recession in two years.

The core consumer price index, which excludes fresh food, stood at 103.5 against a base of 100 for 2010, the Ministry of Internal Affairs and Communications said Friday.

Japan’s central bank introduced aggressive monetary easing measures in April 2013, aiming to achieve 2-per-cent inflation in an economy long plagued by deflation and stagnant growth.

But the inflation rate in October was further away from the target. The government has blamed the fall largely on plunging global oil prices, which have dropped more than 40 per cent since last November.

The world’s third-largest economy fell back into technical recession earlier this year, for the second time since Prime Minister Shinzo Abe took office. It had two quarters of negative growth in April-September 2014 following a controversial hike in sales tax.

The ministry also reported that Japan’s household spending and wages were still falling.

Spending declined 2.4 per cent from a year earlier in October for the second straight month of decline.

Inflation-adjusted monthly wages fell 0.9 per cent to an average of 485,330 yen (3,980 dollars), the ministry said.

Despite Abe’s economic policies, dubbed Abenomics, one of the greatest obstacles to economic growth has been stagnant wages among many Japanese.

In some better news for Abe, however, the unemployment rate fell to 3.1 cent in October from 3.4 per cent in the previous month for the first decline in three months.

Medical and welfare services saw an increase of 260,000 positions to 7.79 million and hotel and catering industries added 130,000 jobs to employ a total of 3.98 million, the communications ministry said.

Despite the improvement in the jobless rate, the proportion of temporary and part-time workers – seen by some as a key problem for the economy – remained nearly 38 per cent, a survey conducted by the ministry showed.

The availability of jobs – measured as the ratio of job offers per job seeker – was unchanged at 1.24 in October, the Ministry of Health, Labour and Welfare said.

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