Japanese Data Show Weaker Output and Demand with Marginal Deflation

December 27, 2011

Industrial production sank 2.6% last month, over three times more than forecast.  Output was 4.0% lower than a year earlier, and the inventory/shipments ratio dropped by 1.7%.  As in September and October, METI officials said “industrial production appears to be flat.

The jobless rate remained at 4.5% in November after a 0.4 percentage point increase in October, but the job offers ratio continued to recover, reaching 0.69.  Although employment was just 0.1% higher than a year before, that was better than the 0.3% on-year decline in September and October.

Real household spending fell 1.3% in November, the greatest on-month decline since March, and was also 3.2% lower than a year earlier.  Real disposable income posted an on-year drop of 1.2%.  Total retail sales fell 2.3% in the year to November, and large-store sales were 2.3% below a year earlier.

Total consumer prices (down 0.5%), non-seasonal food consumer prices (minus 0.2%) and core core inflation (CPI excluding both food and energy, off 1.1%) were all lower in November than a year earlier.  Modest deflation is back.

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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