TOKYO (AP) -- A shrinking economy and spreading layoffs drove Japan's jobless rate to a record 4.6 percent in February, the government said Tuesday, sapping hopes the country would soon emerge from its darkest recession since World War II.

The unemployment rate jumped sharply from the previous month's 4.4 percent -- a record for three straight months -- and swelled the ranks of jobless to a historical 3.1 million."I have to admit that the situation in February was harsher than expected," Taiichi Sakaiya, chief of the Economic Planning Agency, was quoted as saying by Kyodo News agency. "The strength of the recovery is very weak."

The sour figures come as Japan is battling its deepest economic slowdown in 50 years. The government has pumped billions of dollars into the economy in an all-out campaign to prod consumers to spend.

The rising jobless rate also hits Japan weeks after the government announced the economy shrank for the fifth straight quarter in the final three months of last year -- putting the economy on track to contract for the second straight fiscal year for the first time since the war. The fiscal year ends Wednesday.

The grim statistics Tuesday were already putting pressure on the government to do more to bolster growth. Finance Minister Kiichi Miyazawa said he was ready to spend more.

"I'm worried about the unemployment situation," he said. "Although we've taken steps necessary to ease the jobless problem, we're ready to increase budget spending for jobs if necessary."

A major factor behind spreading joblessness is corporate restructuring. Many topflight Japanese companies fighting to regain competitiveness are trimming staffs, selling off subsidiaries and closing offices.

The total number of people without jobs rose by 670,000 from a year earlier to 3.13 million -- the most since the Management and Coordination Agency began recording the data in 1953.

The total number of jobholders shrank by 770,000 from a year earlier to 63.34 million, the agency said. It was the largest-ever decrease in the number of jobholders and marked the 13th consecutive month of declines.

The statistics were not much of a surprise to some.

"It's certainly consistent with the weakness we're seeing in the Japanese economy, particularly in private demand," said Cameron Umetsu, senior strategist for Warburg Dillon Read Japan Ltd. "It promises to get even worse as underlying conditions deteriorate."

The new jobless rate cements the reversal of fortunes between Japan and its top economic competitor, the United States. In the 1980s, it seemed Japan was on track to supplant the United States as the world's supreme economic power. Now Japan is suffering from an unemployment rate that is pulling further ahead of the current U.S. rate of 4.3 percent.

The numbers of Tuesday were the latest in a long string of dour economic announcements in Japan.

The government said earlier this month that gross domestic product shrank 0.8 percent in the last three months of 1998, putting the economy on track to shrink 3.2 percent in the 1998-99 fiscal year if the pace continues. Most analysts expect the economy to shrink as well in the next fiscal year.

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To fight the recession, the government has earmarked a mammoth $682.5 billion dollars in the 1999-2000 budget for public works spending, tax cuts and other stimulus measures.

Officials are also spending $62.5 billion to bail out the country's troubled banks, which are saddled with loads of bad debt from the collapse of the a speculative bubble in the early 1990s.

Despite the disheartening numbers, many in Japan are saying the economy has hit bottom and should be on the mend over the next couple of years.

The Nihon Keizai newspaper published a survey of 112 company presidents on Tuesday, showing that nearly 90 percent believe a turnaround should come before the end of 1999. The newspaper gave no margin of error.

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