The jobless rate held at 4 percent for a second month, suggesting a recovery in consumer spending may falter.

The jobless rate was unchanged in October after rising in each of the two previous months, the Internal Affairs and Communications Ministry said Friday, matching the median estimate of 41 economists surveyed. The proportion of people out of work has risen from a nine-year low of 3.6 percent in July.

The Bank of Japan said worker shortages will prompt firms to up wages, putting more money into the hands of consumers, whose spending accounts for more than half of the economy. Rising energy and raw material costs have made small and medium-size companies reluctant to hire or increase pay.

"The softness that's starting to creep into the labor market is a little bit of a concern," said Katie Dean, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne. "The outlook there is probably not that positive."

The number of jobs available for each applicant fell to 1.02 in October from 1.05 in the previous month, the labor ministry said in a report Friday.

The Cabinet Office this week cut its assessment of the job market, saying that "conditions continue to be difficult and there has been a pause in improvement." The government's downgrade, the first in more than three years, was the result of falling employment at smaller companies.

More than 90 percent of small and medium-size companies said the higher cost of crude oil and petroleum-based products is squeezing profits, according to a survey published this week by the trade ministry.

About 90 percent said they had difficulty passing their costs on to customers — many of which are bigger firms.

"The big enterprises keep their margins and squeeze the little guys," said Takehiro Sato, chief economist at Morgan Stanley in Tokyo.