Industrial output slipped for the second straight month in November, raising the likelihood that the economy will contract in the fourth quarter due to slowing demand abroad and at home.
Japan’s economy has cooled in recent months due to a prolonged hit to exports from soft global demand and a slide in consumer spending following a nationwide tax hike.
Official data showed factory output fell 0.9 percent in November from the previous month, a slower decline than the 1.4 percent fall in a Reuters forecast.
That followed a downwardly revised 4.5 percent decline in the previous month that was the largest month-on-month slump since the government started compiling the data in comparative form in January 2013.
“The overall economy including factory output is expected to contract sharply in the current quarter,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
“It is expected to rebound in January-March, but the issue is how much it will recover.”
Production was pushed down by a decrease in output of production machinery and information equipment, which offset a bounce back in output of cars and car engines.
“There is still uncertainty for the economic outlook as the effects from the U.S.-China trade friction will likely remain, but there are positive signals for a moderate pickup in factory output,” said Hiroaki Mutou, chief economist at Tokai Tokyo Research Institute.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to gain 2.8 percent in December and rise 2.5 percent in January, the data showed.
Separate data released Friday showed retail sales dropped a larger-than-expected 2.1 percent in November, as consumer sentiment remained depressed after October’s sales tax hike.
The weak readings could pressure the government to come up with new ways to boost growth and force the central bank to maintain its stimulus program.
“Economic sentiment has worsened overall,” said Shudai Hasegawa, a shopkeeper at a store selling rice, pickles and other foods in the Shinagawa area of Tokyo.
“There were fewer people in the shopping street here from the start of the year compared to the previous year, and also after the tax hike,” he said earlier this month.
Kota Watanabe, the manager of a store selling pillows and futon mattresses, said demand from consumers over 50 has been weak this year, partly due to warm weather.
“They say they are satisfied with cheap goods. There are also people saving money for their children instead of spending it themselves.”
The broader economy is likely to stay under pressure as weak business and consumer confidence, and a delayed pickup in global growth, hurt demand.
The government last week cut its overall view on the economy for the fourth time this year due to a downgrade in its assessment of manufacturing output.
The Bank of Japan stood pat last week, though it warned risks to the recovery remained high and offered a gloomier view on output.
Also last week the government approved a record budget for the coming fiscal year. Part of the planned spending will help finance a $122 billion fiscal package to shore up growth.
Meanwhile, Japan’s jobless rate fell in November, while the jobs-to-applicants ratio held steady, suggesting the nation’s tightest jobs market in decades is holding up.
The seasonally adjusted unemployment rate fell to 2.2 percent in November from 2.4 percent the previous month, Ministry of Internal Affairs and Communications data showed.
The jobs-to-applicants ratio was unchanged at 1.57 in November from the previous month, health ministry data showed.
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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
OTTAWA – The economy added 47,000 jobs in September, while the unemployment rate declined for the first time since January to 6.5 per cent, Statistics Canada reported on Friday.
The agency says youth and women aged 25 to 54 drove employment gains last month, while full-time employment saw its largest gain since May 2022.
The overall job gains followed four consecutive months of little change, the agency said.
The unemployment rate has been steadily climbing over the past year and a half, hitting 6.6 per cent in August.
Inflation that month was two per cent, the lowest level in more than three years as lower gas prices helped it hit the Bank of Canada’s inflation target.
The central bank has cut its key interest rate three times this year, and is widely expected to keep cutting as inflation has subsided and the broader trend points to a weakening in the labour market.
Despite the job gains in September, the employment rate was lower in the month, reflecting continued growth in Canada’s population.
Statistics Canada said since the employment rate saw its most recent peak at 62.4 per cent in January and February 2023, it’s been following a downward trend as population growth has outpaced employment growth.
On a year-over-year basis, employment was up by 1.5 per cent in September, while the population aged 15 and older in the Labour Force Survey grew 3.6 per cent.
The information, culture and recreation industry saw employment rise 2.6 per cent between August and September, after seven months of little change, Statistics Canada said, with the increase concentrated in Quebec.
The wholesale and retail trade industry saw its first increase since January at 0.8 per cent, while employment in professional, scientific and technical services was up 1.1 per cent.
Average hourly wages among employees rose 4.6 per cent year-over-year to $35.59, a slowdown from the five-per-cent increase in August.
The unemployment rate among Black and South Asian Canadians between 25 and 54 rose year-over-year in September and was significantly higher than the unemployment rate for people who were not racialized and not Indigenous.
Black Canadians in that age group saw their unemployment rate rise to 11 per cent last month while for South Asian Canadians it was 7.3 per cent. For non-racialized, non-Indigenous people, it rose to 4.4 per cent.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
