Japan’s GDP set to rebound in Q3
Print Edition
JAPAN’S unemployment rate hit a 16-year low in May, suggesting the economy will rebound in the third quarter from a sales tax hike and consequent slump in consumer spending.
The jobless rate in the world’s third-largest economy fell to 3.5 percent, the lowest since 1997 and a level the Bank of Japan says is near full employment.
At the same time, the availability of jobs rose to its highest level since 1992, good news for Japanese Prime Minister Shinzo Abe as he tries to cement a recovery after two decades of stagnation.
The strong employment numbers were published alongside other data yesterday showing Japan’s household spending fell 8 percent in the year to May, four times the drop projected in a median market forecast and more than the 4.6 percent decline in April.
The tumble was due mainly to a pull-back in spending on housing, cars and household appliances — all of which saw a surge in demand before the sales tax hike on April 1.
“An (economic) contraction in the second quarter is a certainty, but the job market improvements are positive for the economy,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
The data are unlikely to change dominant market hopes the BOJ will hold off on further monetary stimulus for the rest of this year, analysts say.
“The decline in household spending is too large to ignore, but if you exclude auto sales there are signs that spending is bottoming out,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
Households spent more on items such as television sets, personal computers and clothing in May. Spending on eating out also stopped falling.
Separate data showed core consumer inflation eased slightly in May when excluding the effect of the tax hike, in line with the BOJ’s projections that price gains will slow in coming months before accelerating again late this year.
The BOJ has signaled that it sees no immediate need to widen its massive stimulus program deployed in April last year, stressing that the cooling effect on consumption from the sales tax hike will be temporary.
The central bank has also said Japan is on track to meet its 2 percent inflation target sometime next year, although it projects consumer inflation to hover just above 1 percent for several months as the boost from a weak yen fades.
It sees the sales tax rise to 8 percent from 5 percent would add 1.7 percentage points to annual consumer inflation in April and 2 points from May onwards.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
