Jobless claims steady in Japan (AP) (01-03-2011)

TOKYO -- Japan's jobless rate steadied in January but consumer spending fell from a year ago, underscoring the fragility of its economic recovery as a political battle rages over the next national budget.

The country's jobless rate stood at 4.9 percent in January, unchanged from December. The seasonally adjusted figure indicates a recovery from the recent downturn, when it crept as high as 5.4 percent in 2009, and matched an average of economist forecasts by the Kyodo news agency.

According to the government, consumer spending fell 1.0 percent in January from a year earlier, as the average salary at working households declined.

Although the general drop in the jobless rate means that the country's corporate recovery may be trickling down to the labor market, the fall in spending is a negative. Exports have driven the Japanese economic recovery so far, but private consumption makes up around 60 percent of GDP.

Deflation continues to consist a threat. Last week, government data showed that consumer prices fell for the 23rd straight month, and price falls can lead to wage declines.

Source: AP