Household consumption fuelled half of the rise as government grants to families supported purchases and jobs. The usual comparison with year-earlier figures is blurred because the economy had already begun to shrink late last year due to slumping Chinese demand, supply bottlenecks, an October 2019 consumption tax increase and a destructive typhoon.
As the economies of Japan’s East Asian trading partners are growing again, exports could make a significant contribution in coming months.
The new Regional Comprehensive Economic Partnership could encourage more trade between the member economies even before ratification.
The number of people in work has fallen by just 1.3% from a year ago; any new fiscal support programme will keep job losses small.
Temporary and non-regular workers will bear the brunt of continuing economic weakness: firms have cut working hours by 11.9%.
Firms’ focus on cutting hours rather than jobs will support consumption and the overall economy.
