Japan in a tailspin

Posted by Yuka as Japan

This latest economic data provides a snapshot of the world’s second largest economy from the big picture down to the individual.

Let’s begin with the big picture: industrial output.
According to Japan’s government, in January as compared to the year before, industrial output fell 10 percent, that is a record. Industrial output tells us about all the items Japan makes–cars and electronics. When you zoom in on what’s happening with cars, automobile production according to Japan’s automobile industry, fell 41 percent for the month of January as compared to the year prior.

January is also the month that there were numerous cuts announced by Toyota, Nissan and Honda. Household spending fell 5.9 percent in January as compared to the year before. This is the highest fall, the biggest fall since Japan slipped into recession. And this number tells us about the consumer, how reluctant the consumer is to go out there and spend any money as far as anything in the house. Unemployment remained virtually unchanged from January to December. December, it was 4.3, January, 4.1 percent. But analysts say it’s not because more people are actually working.

“People are starting to give up, in a place like Japan. People are thinking we have the highest rate of bankruptcies, we saw since 2001, 2002. There are no jobs, all my friends are getting fired, this is a terrible world, forget it, I’m just not even gonna bother. So I think that the number is a distorted number and that what you’ll see is more people walking the streets literally as time goes by. ”
All this result of the global economic slowdown as demand falls through Japan’s exports, what happens is that companies have to react, cutting costs, slashing jobs, that is having a true impact overall on this export-driven economy.

Kyung Lah, CNN, Tokyo
Glossary