Industrial output in Japan dropped just over 8% in November compared with the previous month, the biggest fall on record, government figures show.
At the same time, unemployment rose to nearly 4% of the population.
More than 2.5m people were out of work in Japan in November, a rise of 100,000 compared with the year before. Those on temporary contracts are worst affected.
Factories were closed and jobs cut as demand for manufactured goods slumped amid the global financial downturn.
Production at major Japanese manufacturers fell by 3.1% in October.
November's 8.1% drop was the largest since records of such output statistics began.