Data: Japan Economy Still Crumbling TOKYO (AP) -- Japan's troubled economy continued its downward spiral last month, with no indication of a rebound in sight, economic data released Friday shows. Industrial output is sliding, sales at department stores are slumping and unemployment has reached a new postwar high, according to government figures for November. What's more, a report from financial authorities shows that Japan's notoriously troubled banks have even more bad loans than previously thought. Nothing in the latest batch of economic data supports recent predictions by government officials that Japan's worst postwar recession is nearing an end. To try to hasten recovery, Japan's Cabinet on Friday unveiled a draft budget for 1999 that will double the size of the annual deficit as it pays for efforts to kickstart the nation's moribund economy. The 81.9-trillion yen ($706 billion) in proposed spending, which still must win approval from Parliament, represents a 5.4 percent increase from this year's budget. It features 10 trillion yen ($86 billion) in new public works spending and tax cuts worth more than 9 trillion yen ($78 billion). ``This draft budget for fiscal year 1999 has been made up with priority on promoting economic recovery,'' the Ministry of Finance, which compiled the spending proposal, said in a statement. The series of dour economic reports began with the release of November job figures early Friday. The Management and Coordination Agency said Japan's unemployment rate rose to a record-high 4.4 percent as the corporate world cut payrolls and suffered a wave of bankruptcies. The jobless rate was the highest since the government started keeping track of unemployment in the 1950s, topping the previous record of 4.3 percent. For the first time, unemployment in Japan equaled that of the United States, where the jobless rate also was 4.4 percent in November. Taichi Sakaiya, head of the Economic Planning Agency, said the job situation would likely get worse before it gets better. ``There's strong pressure for the jobless rate to rise,'' said Sakaiya, one of Japan's top economic planners. His comments contrasted sharply with his recent upbeat prediction that the economic slump would soon near an end. The news Friday was no better for Japan's once-mighty manufacturers. Industrial output at factories and mines in November fell a larger-than- expected 2 percent compared to the previous month, the Ministry of International Trade and Industry said. The fall was considerably larger than forecast by private economists and the government. And while the ministry predicted there would be a 0.3 percent rebound in production in December, it agreed with other forecasters that a recovery was not yet in sight. ``There still isn't enough data to indicate that the economy has hit bottom,'' the ministry said. Meanwhile, the trade ministry also reported that sales at major department stores and supermarkets fell 1.5 percent in November from a year earlier, the seventh straight month of declines. Economists blame problems at Japan's banks for the prolonged slump. Many banks are buried under mountains of bad loans left from the collapse of a speculative bubble in land prices in the early 1990s. While they battle with those debts, they have cut back on new loans to businesses, contributing to a nasty credit crunch and record rise in bankruptcies. Another report Friday showed the bad loan problem is worse than banks have admitted. The Financial Supervisory Agency said the 17 banks had about 49.50 trillion yen ($427 billion) in shaky loans as of March 31, about 12 percent more than the banks had disclosed.
