TOKYO (AFP) - Japan's factory output has dived, car production has plunged and more workers are hitting the streets, data showed Friday, highlighting the global downturn's grim toll on the world's number two economy. Japan is reeling from the full force of a simultaneous worldwide slump that has devastated demand for Japanese cars and high-tech goods, putting the country on course for its worst recession since World War II. "What's unique about the current crisis is the steepness of the decline," said Hideo Kumano, economist at Dai-ichi Life Research Institute. "The depth and width of the current crisis is much more serious than the burst of the IT bubble in 2000 when only the electronics sector was hit hard." Prime Minister Taro Aso warned parliament Friday that the economy "will take three years to fully heal in the midst of the global recession." In the latest salvo of a months-old barrage of bad economic data, the government said industrial output had plunged 10 percent month-on-month in January, setting a new record after December's 9.8 percent fall. Japan's auto makers on the same day reported that automobile production dropped by a record 41 percent year-on-year in January, the sharpest decline since such figures were first compiled in 1967. Vehicle shipments to the United States, the main export market, nosedived by a full 76.5 percent, and those to Europe by 63.2 percent, said the Japan Automobile Manufacturers' Association. The labour ministry highlighted the human cost of the crisis, predicting that almost 160,000 temporary workers will have lost their jobs in the half year to March as battered companies slash their payrolls. "I regard this as an extremely serious situation," Labour Minister Yoichi Masuzoe told parliament. "We will do our utmost to help their job searches, offering job training and preparing places for them to live." Although the unemployment rate fell slightly, the overall number of unemployed rose 8.2 percent in January from a year earlier to 2.77 million, following a wave of layoffs by struggling Japanese companies. "The labour market is showing clearer signs of worsening as the economy deteriorates," said Monex Securities chief economist Naoki Murakami. The government said core inflation, the measure of how much consumer prices are rising, slowed to zero in January as energy prices fell and domestic demand remained weak, taking the country a step closer to a return to deflation. Amid the deep recession, Japanese household spending tumbled 5.9 percent in January from a year earlier, the government said. Asia's largest economy, once seen as relatively immune to the global financial turmoil, is becoming one of the biggest victims, as the export engine that drove the country's post-war economic miracle grinds to a halt. It is a dramatic turn of events for a nation whose corporate icons such as Sony and Toyota have conquered global markets but are now facing huge losses. In the latest corporate shakeup, Sony Corp. said Friday that its president Ryoji Chubachi will step down in April and Howard Stringer will take over his position while also staying on as chairman. The latest set of grim economic news comes just days after the government said exports plummeted a record 45.7 percent in January. The economy contracted at an annualised pace of 12.7 percent in the last quarter of 2008, the worst performance in nearly 35 years. Japan's lower house on Friday passed a record 88.5 trillion yen (910 billion dollars) budget bill for fiscal year 2009 that aims to stimulate the economy after it is enacted in 30 days. But many observers say Japan's economy will only recover when its overseas markets do. Yoshiki Shinke, also of Dai-ichi Life Research Institute, said "the Japanese economy is crumbling because of its massive dependency on exports. Japan will only see a recovery when the economies of its export markets recover."