Heh, I got a kick out of this. Great news!!! Consumer spending is up in Japan!!! This is how Reuters framed this…..
TOKYO (Reuters) – Japan’s household spending surged in March at the fastest pace in nine years in a sign that Prime Minister Shinzo Abe’s bold efforts to end two decades of stagnation are lifting consumer confidence and setting the stage for an economic revival.
A recent run of data has provided encouraging early hope that Abe’s push for aggressive fiscal and monetary policies to get the world’s third-largest economy motoring is having the desired effect.
Now, increased consumer spending is, indeed, usually a good sign. However, like nearly all things in economics, it’s a double edged sword. Consumer confidence is a good thing, but, you want some reality to accompany the increased confidence.
While Japan’s industrial production rose less than expected in March due to tepid demand overseas, economists are confident that exports and factory output will eventually pick up due to a weaker yen.
On the whole, the figures suggest that expectations for Abe’s combination of fiscal spending, monetary stimulus and structural reforms, known as “Abenomics,” are having a positive impact on the household sector although the corporate sector is lagging behind.
The only problem I have with that is the fact that Abe’s policies haven’t had time to do anything. So, what’s going on?
Household spending soared 5.2 percent in March from a year earlier in price-adjusted real terms, Ministry of Internal Affairs and Communications showed on Tuesday, as some individual investors cashed in on gains in stocks to increase spending on cars and home repairs.
Such a big increase in spending is unlikely to be sustainable, and there are worries that wages have been slow to improve. Economists have also warned in the past that the sample size for household spending is small and easily swayed by big ticket purchases.
One worrying sign was the slow uptick in industrial production, which rose a less-than-expected 0.2 percent in March, according to data from the Ministry of Economy, Trade and Industry.
Manufacturers surveyed by the ministry expect output to rise 0.8 percent in April and fall 0.3 percent in May, the data showed.
Japanese retail sales fell 0.3 percent in March from a year earlier, according to a separate release from the Ministry of Economy, Trade and Industry.
That was counter to the median estimate for a 0.6 percent annual increase, but economists say the data may not accurately reflect consumption, because it does not include spending on services.
Smoke and mirrors. What happened in March was that many were separated from their wealth. Consumer spending was up but retail sales went down? We know that even if Abe’s monetary policies would work, the printed cash hasn’t had time to move to the consumers, so the QE isn’t what caused the numbers. Wages haven’t increased and production barely did.
So, why does Reuters couch this news in a common refrain that QE helps things? Because they’re socialists. They are entirely invested in the idea that one doesn’t have to earn economic growth. In the past, if the government is running low on money, just raise taxes! Just sell bonds! Just do anything other than earn the growth. Now that the debt and taxes formula has failed in such a spectacular way, the statists and socialists have struck upon the idea that one just has to print money. Do anything, everything to avoid the realities of what makes a healthy and strong economy.