Japan Government Says Economy Improving - Oh, Really?

Tired of clinical government data saying the economy is turning up again here in Japan because production rose in March, I spent a couple of hours at the Tochigi branch office of Hello Work, Japan's national employment agency. I'll report what was there, and you decide just how healthy the economy has become since the doomsday headlines of two months ago.

There were 20 staff members running the office, eight of whom interviewed candidates for various jobs to set up profiles, make a list of desired work, and produce other elements of an employment file. There were 80 people seeking work. Some browsed postings on bulletin boards and took notes. Others flipped through binders of job listings categorized by industry and region. Others searched at computer terminals. Another group waited along the walls, in the lobby, and even in the parking lot to be called for an interview.

The most plentiful jobs were in the "Service" category, and included restaurants, hotels, golf courses, and such. The pay ranged from $1,500 to $3,000 per month for salaried positions, and $8 to $12 per hour for hourly positions. Comments I overheard from those browsing were "still nothing," "getting worse," "cheaper every week," "I might as well work at 7-Eleven," and similar notes of discouragement.

The wait time for an interview was more than two hours.

I asked the harried information clerk whether the place was busier than usual and she said yes, more than twice as busy. When did it get this busy? Just last month.

The unemployment rate is a lagging indicator, but this recession is not exactly new. For the employment agencies to have more than doubled their usual volume of job seekers just last month sure sits at odds with the idea that this crisis is almost over. It was just two months ago that people were talking about the worst economic meltdown since the Great Depression. Now -- poof! -- it's over and everybody can get back to their favorite TV shows. Either it was never as bad as media sensationalized it to be, or it isn't over yet.

Maybe the right man to listen to on this is Toyota (TM) President Katsuaki Watanabe, who said at a press conference Friday: "The current severe environment will continue for the time being." Toyota believes the global economy won't recover any time soon, he added. His is a company that should know. From Friday's Wall Street Journal:

Crippled by stagnant demand and a strong yen, Toyota Motor Corp. Friday reported its first net loss in 59 years in the just-ended fiscal year and said it expects even deeper losses in the year to come.

The world's biggest car maker by volume posted a net loss of Y436.94 billion in the fiscal year ended March, as it booked a net loss of Y765.8 billion, or about $7.74 billion, in its fiscal fourth quarter. The January-March loss was not only the company's biggest loss ever but one of the largest quarterly losses on record by a Japanese manufacturer.

Toyota's fourth quarter net loss was wider than analysts' mean loss estimate of Y746.2 billion compiled by Thomson Reuters. The quarterly loss also compares with the Y316.8 billion profit that Toyota reported for the same period a year earlier.

For the current fiscal year ending March 2010, Toyota expects an even greater net loss of Y550 billion.

Comments

[Deweyp:]

Most folks I talk to think the Yen is about at par where it is now (99 - $1). Much of Toyota's past profit was produced by an unduly low Yen allowing them to use that profit to augment to the worlds #1 auto manufacturer. I agree with you that employment world wide will continue to decline. Looking at past economic downturns, employment levels remain depressed for up to 14 months after recovery.

May 10 10:05 AM

[John in Japan:]

Then again, at a time of a lot of school leavers (March/April), it is always busy at Hello Work at this time of the year. To go the other way, I went to Daimiyo Dept. store last Saturday, and there were people everywhere, and they were all buying. Go to your local restaurant, and they are doing a brisk business too. I think that even though the common view is that it is all doom and gloom, the society here is a cash one, and they seem to still be spending...Yes, unemployment is rising, but I think you will find that it won't rise here as fast or for as long as other countries. Many people here are feeling the pinch, but not as many as you would think for a country population of this size.

May 11 08:37 AM

[nielsdartfam:]

It’s great that the world is breathing a sigh of relief, but whats really important is what comes next. Here: www.mindreign.com/en/m... this guy knows more than me

Aug 28 04:01 PM