Japan jobless rate hits record high

Unemployment soars to 5.7% in July, highest since World War II.

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TOKYO, Japan (CNN) -- Unemployment in Japan hit 5.7% in July, the highest on record since World War II.

Joblessness in the world's second-largest economy has been steadily rising from 4.8% in March to 5.4% in June. The record July number exceeded analyst predictions of 5.5%, which would have matched the previous postwar record.

The news days before Japan's elections this weekend could augur the end of rule of the nation's Liberal Democratic Party, which has had an iron grip on the government for most of the past half century.

Japan's core consumer price index fell 2.2%, which could heighten deflation concerns.

The unemployment report ends a month of mixed economic news for Japan, which limped out of recession with slight growth in the past quarter. But trade data saw exports decrease in July after posting two months of slight gains.

Data released Wednesday showed that shipments in July fell 36.5% by value year-on-year, outpacing the 35.7% decline in June. On a seasonally-adjusted basis, exports fell 1.3% from June.

Japan's economy grew 3.7% on an annualized basis from April to June this year, the first time it has seen positive growth in 15 months. Japan's GDP grew just under 1% during the three-month period and trade increased 1.6%.

Japan joined major economies such as Hong Kong, France and Germany by posting slight growth for the second quarter of the year.

The news that Japan -- the hardest hit of the major economies because of its reliance on exports -- had rebounded from recession triggered cautious optimism among economists that the worst of the global recession was over. Net exports, especially in high-tech industries and materials such as chemicals and steel, tentatively led Japan out of recession.

The uptick marked the end of the worst recession in Japan since the end of World War II. Japan's GDP fell at a record pace during the January-March quarter, when GDP was 15.4% lower than the same time period last year.

Prime Minister Taro Aso's government had hoped a political as well as economic bounce would result from its historic $150 billion stimulus package in May, which included unemployment benefits, aid to struggling companies, promotion of green industries and various tax breaks.

--CNN's Kyung Lah contributed to this report. To top of page

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