WHY NOT JUST HAVE GREG ZAUN WRITE THE ECONOMICS STUFF?:

Japan sends slow-growth signals (Todd Zaun, December 29, 2004, The New York Times)

Although the unemployment rate declined, the reason for the drop was that there were fewer people looking for work, not an increase in the number of jobs. The economy shed 150,000 jobs in November, and some 450,000 people dropped out of the labor market.

The increase in industrial production was the first in three months, but the pace was a bit slower than had been expected. Economists had forecast that production would grow 1.9 percent. [...]

The Japanese economy grew at an annual rate of just 0.2 percent in the third quarter after shrinking 0.6 percent in the second quarter, according to revised growth figures released earlier in the month. The abrupt slowdown from a 6.8 percent annual growth rate in the first quarter of this year came as increases in exports and capital investment slowed.

The sudden deceleration raised concern that Japan would slip back into a recession. [...]

Consumption, which accounts for more than half of the economy, has been weak amid a long slump in income growth, and there are few signs of that changing soon.

Household spending sank 0.9 percent in November from a month earlier as people spent less on food and clothing, according to another government report released on Tuesday. Consumption is unlikely to pick up until incomes begin to rise, and although that is not happening yet, there are signs the labor market is getting tighter. That could push wages higher, if it continues. [...]

Meanwhile, the government said that consumer prices declined 0.2 percent in November from a year earlier, extending a six-year run of deflation in Japan.

How high would you have to push wages before it made sense for folks to buy stuff that always costs less next month than this? And how can companies raise wages when they have no ability to recoup them via price hikes?

Posted by Orrin Judd at December 29, 2004 8:59 AM