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Economy in Brief
NABE Projects Firm Growth in 2022, as in 2021
The NABE expects 4.0% real GDP growth in 2022 following a 4.8% rise during 2021...
U.S. Construction Spending Strengthens Again in January
Building activity continues to strengthen...
Manufacturing PMIs Are Strengthening More in the Developed World
PMIs largely are improving in February...
U.S. Personal Income & Spending Surge With Stimulus Payments in January
Personal income jumped 10.0% (13.1% y/y) last month...
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone February 23, 2005
Has Japan fallen into yet another recession? Last week's GDP report, with a third consecutive decline in Q4, was read by some analysts as indicating just such a renewed slump. Wednesday in Tokyo, the Ministry of Economy, Trade and Industry (METI) published industry activity data for December that might be seen casting a somewhat brighter light on the Japanese economy.
The All-Industry Activity Index (2000=100) fell 0.3% in December after a 0.2% rise in November. The graph shows that it was strong but erratic in the spring and has softened in the last several months, basically stagnating over the second half of the year.
Among its components, construction activity has been in a long downtrend since the outset of its index in 1993 and it remains on that path. The most favorable observation on this series is that the 3.8% year-on-year decline in December is the smallest since July 2003.
The industrial production index, reported about a week ago, fell 0.8% in December, but that followed a 1.7% jump in November, tracing an erratic month-to-month pattern. The trend, indicated by the December-to-December growth, saw a 1.8% advance, which is slower than the gains for 2003 and 2004 overall.
Tertiary activity, that is, services, was flat in December, but it too had risen in November, and in December was 2.2% ahead of a year earlier. In contrast to other sectors, services seem to be picking up somewhat. This tendency varied widely among service sectors, however, as wholesale and retail trade held some gains, while restaurants and accommodations stumbled. Information services sagged markedly early in 2004, but firmed noticeably late in the year.
Thus, it's difficult to put a single characterization on the Japanese economy at this time. "Fragile" might fit, with an easy potential to weaken. But service industries, as in other nations' economies, may be providing some stability, helping to diminish cyclical tendencies.
Dec 2004 | Nov 2004 | Q4/Q3 | Dec 04/ Dec 03 | 2004 | 2003 | 2002 | |
---|---|---|---|---|---|---|---|
All- Industry Activity | -0.3 | +0.2 | -0.1 | +1.7 | +2.3 | +0.9 | -0.4 |
Construction | -1.6 | -1.0 | -0.9 | -3.8 | -5.7 | -5.3 | -4.3 |
Industrial Production | -0.8 | +1.7 | -0.7 | +1.8 | +5.6 | +3.2 | -1.2 |
Tertiary Activity | 0 | +0.4 | +0.5 | +2.2 | +2.1 | +0.8 | 0 |
Memo: GDP | -- | -- | -0.1 | +0.6 (Q4/Q4) | +2.6 | +1.4 | -0.3 |