Global| Mar 28 2008Japan’s Inflation Rate Rises but ‘Core’ Still Below Zero Y/Y
Summary
Japan has been gradually making progress toward ridding itself of its chronic deflation. Headline inflation now has turned positive year-over-year and is positive over three months as well as over the six-month horizon. The 12-month [...]
Japan has been gradually making progress toward ridding itself of its chronic deflation. Headline inflation now has turned positive year-over-year and is positive over three months as well as over the six-month horizon. The 12-month calculations are markedly different from the year ago calculations which refer to the previous 12-month period when the economy was more firmly in the grip of deflation. Still, core inflation (ex-food and energy) has not yet moved up above the zero mark.>
In the quarter to date, inflation also has a positive tone. Headline inflation is up at a 1% pace while the core is up at a 0.4% pace and ex-food prices are rising at a 2.3% rate. Most CPI components are rising in the first quarter of 2008 as well.
For Japan this mild inflation is a mark of success while other countries are suffering with true inflation risks. Japan is emerging from its battle with deflation, but it is still fighting to secure growth.
| Japan CPI Trends | ||||||||
|---|---|---|---|---|---|---|---|---|
| Feb-08 | Jan-08 | Dec-07 | 3-mo | 6-mo | 12-mo | Yr-Ago | Qtr-to-Date | |
| All items | 0.1% | 0.0% | 0.1% | 0.8% | 1.2% | 1.0% | -0.8% | 1.0% |
| All items less food and energy | -0.1% | 0.1% | -0.1% | -0.4% | 0.2% | -0.1% | -1.2% | 0.4% |
| All items except fresh food | 0.1% | 0.1% | 0.4% | 2.4% | 1.8% | 1.0% | -0.4% | 2.3% |
| seasonally adjusted BY Haver | ||||||||
| Food & Beverage | 0.2% | -0.2% | 0.1% | 0.4% | 0.0% | 1.2% | 0.4% | -0.5% |
| Housing | 0.0% | 0.0% | 0.1% | 0.4% | 0.2% | 0.0% | -1.2% | 0.3% |
| Clothing and Personal | -0.2% | 0.2% | 0.0% | 0.0% | -0.2% | 0.7% | 1.6% | 0.8% |
| Education | 0.1% | 0.1% | 0.0% | 0.8% | 0.8% | 0.7% | 3.2% | 0.9% |
| Medical care | -0.1% | 0.1% | 0.0% | 0.0% | -0.8% | 0.1% | -1.2% | 0.2% |
| Miscellaneous | -0.1% | 0.1% | 0.0% | 0.0% | 0.4% | 0.5% | 4.5% | 0.1% |
| Reading & Recreation | -0.3% | 0.1% | -0.3% | -2.0% | -0.8% | -0.9% | -4.4% | -1.2% |
| Transport & Communication | -0.1% | 0.2% | 1.0% | 4.4% | 5.0% | 3.1% | -1.6% | 5.7% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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