Japan Production Rose Less Than Expected

Japan received another jolt of bad economic news as industrial production rose less than expected, consumer spending and prices fell, and the jobless rate held at a record high 5% in August.

Production rose 0.8% in August from July, less than the 2.8% increase economists expected. Companies were already trimming production this month before terrorist attacks on the U.S. sparked fear of a global recession, and Fujitsu Ltd. and NEC Corp. have since signaled deeper cuts may be in store.

Japan’s economy is probably in recession for the fourth time in just over a decade. Gross domestic product shrank 0.8% in the second quarter from the first quarter, and will probably contract again this quarter, economists said.

Consumer’s reluctance to spend is dragging the economy down. Household spending fell 1.3% in August from July, more than the 1.1% drop economists had forecast. Consumer spending makes up about 55% of gross domestic product.