Japan Factory Output Jumps, Momentum In Doubt

Reuters ^ | 12-28-2009 | Stanley White

[blam]

Japan Factory Output Jumps, Momentum In Doubt

Stanley White
Mon Dec 28, 2009 2:46am EST

TOKYO (Reuters) - Japan's industrial output rose for the ninth consecutive month in November, driven by strong exports and domestic subsidies, but swelling inventories and falling wages threaten to end the longest climb in more than 12 years.

Demand from the United States and Asia contributed much to last month's 2.6 percent rise, government data showed on Monday, supporting the Bank of Japan's view that the world's second-largest economy will continue its moderate recovery next year.

Economists say overseas demand should prevent a return to recession next year.

However, declining wages and weak labor market may outweigh the effect of government subsidies on energy efficient goods, forcing manufacturers to curb output and start selling down inventories built up in anticipation of better sales.

"The latest data shows that Japanese makers of automobiles and home electrical appliances are still hiking their output thanks to the continuing effect of government stimulus as well as strong exports to Asia," said Seiji Shiraishi, chief economist at HSBC Securities in Tokyo.

"But a slowdown is still expected early next year as the effect of stimulus will likely fade."

Japan's wages fell for the 18th consecutive month in November from a year earlier, in a sign that deflation, or persistently falling prices and incomes, was entrenched. This exposes the central bank to more pressure from the government to ease monetary policy further.

[snip]

[blam]

Late Holiday Shopping Puts Retailers Ahead

BY ANN ZIMMERMAN AND RACHEL DODES
December 28, 2009

Retailers won the closely watched holiday skirmish with shoppers, who opened their wallets a little bit despite a still struggling economy, fewer discounts than last year and limited variety on store shelves, according to newly released data.

A late boost from procrastinating consumers and an extra day of shopping between Thanksgiving and Christmas increased total retail sales, excluding automobiles and gas, 3.6% over the year-earlier period through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit.

Still, excluding the extra shopping day, the sales increase would have been closer to 1%, MasterCard said.

While some retail sectors fared better than others, ...

[snip]

[blam]

Chinese Industrial Profit Returns To Growth In Nov

Mon Dec 28, 2009 4:40am GMT

BEIJING, Dec 28 (Reuters) - Profits at Chinese industrial companies returned to growth in January through November, ending a year of declines and offering clear evidence of a stronger recovery for the country's businesses.

Industrial profit nationwide rose 7.8 percent in the first 11 months from a year earlier, the National Bureau of Statistics said on Monday.

That marked a dramatic turnaround from a fall of 10.6 percent in the first eight months of the year, the last time the NBS conducted a nationwide survey.

The NBS releases nationwide year-to-date profit data for February, May, August and November.

Economists attributed the rise largely to a low base of comparison in the final months of 2008, when the world's third-largest economy was hit hard by the global financial crisis.

[snip]

[dynachrome]

In my limited area of viewing the economy, it looks like the average consumer is not willing to take on more debt, even if available. Monthly income v. monthly outgo. At a certain point most people go “hey, wait a minute...”