The figures are likely to fuelng worries that bleak job conditions may overwhelm government efforts to boost consumption, delaying an economic recovery.
“The effects of stimulus spending are likely to be short-lived,” Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo, told Reuters news agency.
“Given a drastic cut in summer bonuses among manufactureres, personal consumption will slump again from the summer onward and put downward pressure on the overall economy.”
|Japan’s export-dependent economy has seen demand in key markets plunge [EPA]|
The latest gloomy figures come as the Bank of Japan prepared to release its closely-watched “tankan” survey of corporate sentiment on Wednesday.
Many Japanese companies, particularly exporters, have slashed jobs and production in response to a slump in demand caused by the global economic downturn.
According to a separate report from the labour ministry, there were only 44 job offers for every 100 job seekers in May, a record low and down from 46 in April.
Japan’s economy entered recession in the second quarter of 2008 as its heavy reliance on overseas markets as a main contributor to economic growth left it vulnerable to the fallout from the financial crisis.
The Japanese economy suffered its worst contraction on record in the first quarter of 2009, shrinking at an annualised pace of 14.2 per cent.
Experts say a full recovery is unlikely in Japan until demand increases in major overseas markets such as the United States and Europe.
In separate data released on Tuesday, Japanese retail sales fell by 2.9 per cent in May, the ninth successive monthly fall.
Prices are also dropping in the face of weak domestic demand, a troubling trend that threatens to hamper an economic recovery.
Last week, the government said Japan’s key consumer price index tumbled at a record pace in May.