HIGHLIGHTS-Japan inflation hits fresh decade-high

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TOKYO, June 27 (Reuters) - Japan's annual consumer inflation accelerated to a decade-high in May on surging energy costs while job market conditions stagnated.

Industrial production rebounded in the month, but the government cut its assessment for the first time in six months, citing weakening demand in the United States and Europe.

Following are highlights of the data, based on briefings by government officials.

CPI

-- Excluding the impact of a two-percentage-point hike in the consumption tax in 1997, core CPI inflation is at the highest since early 1993.

-- Rising food and fuel prices accounted for most of the increase.

-- The CPI excluding food and energy prices fell 0.1 percent from a year earlier, due largely to a fall in car insurance premiums as a result of fewer road accidents in recent years, a government official said.

-- The so-called core-core CPI, which excludes special factors such as changes in public service fees and is compiled separately by the Cabinet Office, rose 0.77 percent in May, the highest since the data began in 2004.

JOBS DATA

-- The number of workers fell by 210,000 in May, the largest drop since a 370,000 decline in June 2004. The number of those unemployed increased by 120,000, the biggest rise since January 2003, when it rose by 130,000.

-- Job conditions appear to be getting worse among older men while the jobless rate among young people is improving, a government official said.

-- The official said the government maintained the assessment that the improvement in job conditions is stalling.

INDUSTRIAL OUTPUT

-- Industrial output rose 2.9 percent in May from the previous month, led by robust production in the automobiles and information and communication sectors.

-- Manufacturers surveyed forecast output to fall 0.9 percent in June but rise 2.2 percent in July.

-- Based on the latest readings, production in April-June is expected to fall 0.4 percent from the previous quarter, marking two consecutive quarters of declines.

-- The Ministry of Economy, Trade and Industry, which compiles the data, downgraded its assessment, saying output is somewhat weak although the trend remains flat. The downgrade was the first in six months.

-- A ministry official said demand was weakening in industrialised countries, mainly in the United States. The outlook for Europe is also dim.

-- The official also expressed concern that high raw material prices may affect corporate capital spending and consumption.

-- On the other hand, demand in some emerging economies that export resources is strong as they benefit from the high raw material prices, the official said.

RETAIL SALES

-- The government downgraded its assessment on retail sales for the first time since January last year, saying sales are largely flat, ditching its previous view that they are showing signs of recovery.

-- A official at the trade ministry also said retail sales slowed sharply in April and May partly because auto sales lost steam.

HOUSEHOLD SPENDING

-- A government official said May's fall in spending was exaggerated by a drop in spending on funerals, weddings, hospitalisation and other one-off charges.

-- The official said the government thought the real trend in the fall was about half of the headline 3.2 percent drop.

-- Household spending data is widely considered to be unreliable because the sampling is too small, and it is skewed because too many public workers are included, analysts say.

(Reporting by Tokyo Economic Policy Desk)