The government lowered Dec. 22 its assessment of the economy for the third straight month, using the word "worse" for the first time in about seven years, on the back of sharply falling corporate profits, capital spending and job opportunities.

Economic and Fiscal Policy Minister Kaoru Yosano (center) chats with Prime Minister Taro Aso during a ministers' meeting Dec. 22. KYODO PHOTO

"The economy is worsening," the Cabinet Office said in its monthly economic report for December, a downgrade from the previous month's evaluation that "the economy has weakened further."

This is the first time since February 2002 that the office has adopted the word "worse" in its monthly overall assessment.

The last time it used an expression like the economy is "worsening" or "continues to worsen" was between June 2001 and February 2002, when Japan struggled with the fallout from the collapse of the information technology bubble.

"I find it difficult to imagine that there will be a pickup" in the economy in the near future as "there are many uncertain elements" abroad, Economic and Fiscal Policy Minister Kaoru Yosano said at a news conference after the release of the report.

The report conjures up bleak prospects, saying, "While the economy is likely to continue worsening for the time being, there is fear that the employment situation is worsening further due to the rapid reduction in production.

"Attention should be given to the risks that the economy could become severer due to the worsening global financial crisis," it says.

It says the corporate segment in particular is faltering and lowers the ratings for a range of key areas, including capital spending and corporate profits.