TOKYO -- In the latest gloomy sign for the world's third-largest economy, Japan on Friday said factory output for November was down 1.7% from the previous month.

The drop -- worse than a 0.5% decline expected by the market -- came as a new conservative government took power this week on a campaign that pledged to inject new life into the country's limp economy, after it won a landslide election earlier this month.

"Industrial production is on a downward trend," the economy ministry said.

However, a survey of manufacturers offered some positive news, with producers expecting output to rise 6.7% in December and 2.4% in January.

Japan's economy has been hurt by a strong yen, turmoil in the key European market and the global economic slowdown.

A territorial dispute with Beijing has also weighed on Japanese exports due to a consumer boycott in China stemming from the spat.

In other data released Friday, Japan's unemployment rate stood at 4.1% in November, down slightly from 4.2% the previous month, according to the internal affairs ministry.

November consumer prices slipped 0.1% from a year earlier.

The reading for the core inflation index, which excludes volatile prices of fresh food, was in line with economists' average forecasts.

Japan has been in deflation for years, putting the Bank of Japan under increasing pressure to reverse the trend. New Prime Minister Shinzo Abe has threatened to revise a law guaranteeing the independence of the central bank if it does to agree to set a 2% inflation target.

Copyright Agence France-Presse, 2012