Friday, December 08, 2006

Oh Bark!

Remember this?

Japan's Economy Expands at Twice Expected Annual Pace

By Lily Nonomiya -- Nov. 14 -- Japan's economy grew twice as fast as expected in the third quarter, spurring gains in the yen on speculation the central bank will raise interest rates next month to cool surging corporate spending.

Well, it turns out--to have not been exactly correct.

Indeed, it turns out to have been worse than I thought.

Rather worse.
Japan's economic growth revised downward
Business Week Online

By YURI KAGEYAMA - TOKYO - Japan's economy grew at a far weaker pace in the third quarter than previously reported due to downward revisions in consumer spending and capital investment, the government said Friday, raising concerns about the recovery's strength.

Gross domestic product expanded at an annual rate of 0.8 percent, well below the preliminary 2.0 percent announced in November, but marked the seventh straight quarter of expansion, the government said.

Domestic demand -- which includes consumer spending, government spending and private investment -- had contracted 0.2 percent from the previous quarter instead of inching up 0.1 percent, as previously thought.

Corporate capital investment was weaker than initially estimated, while consumption dropped more than the first reading.

"The big change was in private investment," said Hiromichi Shirakawa, chief economist at Credit Suisse First Boston Securities.

But he expects better results in the fourth quarter because the consumer mind-set was discouraged by a number of factors during the previous quarter, including higher energy costs, an interert rate hike by the Bank of Japan, a faltering Tokyo stock market.

Economy Minister Hiroko Ota blamed the downward revision mostly on weak consumer spending, but assured the public that Japan's economic revival was on track.

"The lower GDP was mainly caused by weak consumption," she said. "I don't have any concerns that the economy will fall into a downward trend. Nor do I see any signs of its entering a lull."

Uh, Special Advisor Ota, did you look at the nominal growth figure before you spoke?

You know, the number of actual yen moving around in the economy, without the statistical fiddle of trying to estimate the relative value of things?

Nominal Growth 3rd Quarter: 0.0%

That sure looks like a "lull" to me.

1 comment:

Jun Okumura said...

Hmm, nice timing. This means the BOJ will not bite? In which case the Japanese government will have spun us a yarn, but will finish the year without a punchline. Sounds like a shaggy dog story to me.