18 Feb 2016
Japanese economy set for a lull – Nomura
Research Team at Nomura, notes that according to first preliminary GDP estimates for 2015 Q4 released on 15 January, Japanese real GDP slipped to negative growth of -1.4% q-q annualized.
Key Quotes
“That contraction was due largely to a downturn in real consumer spending, but we think it likely that the Family Income and Expenditure Survey (FIES) that provided core data for the Q4 GDP estimates gave a weaker picture than the underlying position due to sample bias.
Incomes of the heads of working households in the FIES declined more than real incomes per employee in the Monthly Labor Survey in Q4. Various surveys show that indicators of consumer sentiment were on an improving trend in Q4 and considering also that real retail sales in the quarter rose 0.3% q-q and that shipments of consumer goods expanded 1.1% q-q, we think underlying consumer spending probably held essentially flat.
On that basis, we think it likely that real GDP in Q4 was also basically on a par with the previous quarter. We think it reasonable to say that the Japanese economy levelled out in Q4 after real GDP expanded 1.3% q-q annualized in Q3.”
Key Quotes
“That contraction was due largely to a downturn in real consumer spending, but we think it likely that the Family Income and Expenditure Survey (FIES) that provided core data for the Q4 GDP estimates gave a weaker picture than the underlying position due to sample bias.
Incomes of the heads of working households in the FIES declined more than real incomes per employee in the Monthly Labor Survey in Q4. Various surveys show that indicators of consumer sentiment were on an improving trend in Q4 and considering also that real retail sales in the quarter rose 0.3% q-q and that shipments of consumer goods expanded 1.1% q-q, we think underlying consumer spending probably held essentially flat.
On that basis, we think it likely that real GDP in Q4 was also basically on a par with the previous quarter. We think it reasonable to say that the Japanese economy levelled out in Q4 after real GDP expanded 1.3% q-q annualized in Q3.”