Japan’s economy marked a seven-quarter growth run through September — the longest in 16 years — but the outlook appears less rosy, as surprisingly strong private consumption before this summer may prove to have been just a blip.
Japan’s economy marked a seven-quarter growth run through September — the longest in 16 years — but the outlook appears less rosy, as surprisingly strong private consumption before this summer may prove to have been just a blip.
With policymakers hoping consumers were finally loosening their purse strings, there is a sense of disappointment that the goal of achieving improved domestic demand remains elusive. Gross domestic product grew at an annualized rate of 1.4 percent in July-September amid robust exports of electronic components and cars. But the data released Wednesday showed private consumption, accounting for nearly 60 percent of the GDP, fell for the first time in seven quarters. It slipped 0.5 percent in July-September following a 0.7 percent increase in April-June. Economists say there is no cause for excessive pessimism as the slowdown was widely expected and private consumption will likely trend toward a moderate recovery. But the prevailing view is that robust wage growth continues to be the missing link that would spur consumers to become more confident about spending.
