A Little Good News? Or Not?

http://www.bloomberg.com/news/articles/2015-01-29/japan-s-production-rises-less-than-forecast-in-challenge-for-abe

Some good news out of Japan as industrial output rose 1.8 percent in the third quarter. Also the labor market improved as the ratio of job to applicants increased which might indicate companies are beginning to expand, somewhat. Furthermore, a 1 percent increase in production in December was the largest in since 2010.

Of course consumer spending is still the main drawback in the Japanese economy, as consumers are still taking a wait and see approach, or more a wait and see for the last 20 years. Until they see their wages increase to the point of feeling good, there might not be much help from consumer spending. The government still needs to find strategies to stimulate the economy enough to get consumers feeling and before that try to get businesses to feel good enough to raise wages and improve investment spending. Along with fiscal and monetary strategies.

Its a puzzle that keeps getting more complicated. How to get the economy out of its short term up and down mode the last twenty years into some real sustainable growth. Too many pieces of the puzzle have to be manipulated or stimulated at once and which do you ignore and which do you put a priority on to get more growth.

© 2015 Tom Metts,  all rights reserved