JAPAN Q2:

 https://mainichi.jp/english/articles/20210816/p2g/00m/0bu/012000c

Article:

TOKYO (Kyodo) -- Japan's economy in the April-June period grew a real 0.3 percent from the previous quarter, or an annualized 1.3 percent, as robust exports were overshadowed by sluggish consumption under a state of emergency over the coronavirus pandemic, government data showed Monday.

It was the country's first increase in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, in two quarters, according to the preliminary data released by the Cabinet Office.

Although the growth figure was better than the average projection of 0.7 percent annualized growth by private-sector economists, the GDP rise was too slow to make up for the January-March quarter's 3.7 percent contraction.

Ideas:

The Japanese economy has a long way to go before there will be any real sustained growth. Growth that will be consistent from quarter to quarter and not just one somewhat good quarter or economic growth and then another quarter of negative growth.

But unfortunately even before the pandemic it seemed like that was the pattern of growth of the Japanese economy.

For whatever reason, the Japanese economy has not been able to really maintain any real quarter to quarter growth for very long.

The Japanese economy seems to take one or two steps forward and then the next quarter one or two steps back. 

So no wonder the Bank of Japan can't seem to figure out how to get inflation to the two percent level when the economy doesn't grow consistently from quarter to quarter.

Article:

With Japan lagging behind other major economies in its vaccine rollout, the latest data highlighted the lack of momentum in the country's economic recovery after its worst slump on record last year caused by the pandemic.

In the same three-month period, the U.S economy grew an annualized 6.5 percent and the euro area logged an 8.3 percent expansion.

"It is vital for us to support businesses and employment while giving the highest priority to curbing the spread of virus infections," economic revitalization minister Yasutoshi Nishimura told a press conference after the GDP data release.

Ideas:

Yes, the vaccine rollout has not been where it should be, but at the same time, even as more and more people become vaccinated, the virus variants seem to be spreading. 

But even with that the more people vaccinated should help in the economic recovery, but it remains to be seen just how much it can help if the virus variants keep growing.

And with the US and its supposed 6.5 percent annualized growth, the latest jobs reports in the US was less than expected. Many are blaming the growth of the new virus variants which might be affecting supply chains and domestic demand.

Even some large related chains such as Walmart are now beginning to put limit restrictions on purchases as a way to limit shortages on some products as was the case in the Spring of 2020.

And the latest news is/was there are over 8 million people who lost their jobs during the pandemic who have not found a new job and are about to lose their unemployment benefits.

So even a 6.5 percent growth has its problems and challenges as that doesn't mean all businesses are growing or doing good.

Yes, maybe more should be done to help any Japanese business that is still having problems during the pandemic.

Even when most people get vaccinated it seems the pandemic is far from over which has the potential to limit consumer spending, maybe limit capital spending, and many other areas of economic growth.

Article:

Amid a resurgence of virus infections, the government declared a third virus emergency in late April for Tokyo and three western Japan prefectures, and later expanded it to 10 out of the country's 47 prefectures. It was lifted in late June, except for the southern island prefecture of Okinawa.

Consumer spending rose 0.8 percent from the previous quarter, the first increase in two quarters. In the January-March period, spending fell 1.0 percent as parts of the country were under the second virus emergency.

Exports rose 2.9 percent, up for the fourth consecutive quarter.

The third virus emergency weighed heavily on private consumption, with eateries serving alcohol asked to suspend their operations and dining establishments not serving liquor to close early. People were requested to stay home.

Ideas:

Its seems apparent at this point, while good intentions, the Japanese emergency measures are not exactly working.

But to be fair, even as more people become vaccinated, which of course is meant to deter or reduce the virus situation, its not working, as it seems Tokyo and the Kanto area seems to hit now with even more infections.

And as the news media presents the number of cases each day over and over, the public will continue to refrain from going out and about and as such the consumer spending, while up some, might continue to not be where it should be.

The growth of exports is always a good thing, but the Japanese economy can't rely on exports only for its growth. The Japanese economy is now just too big to rely on exports to the US, the EU, or China to sustain any real growth in the economy overall.

Article:

Affected by a global semiconductor shortage, car-related exports were not in full swing, but demand for chip-making equipment and other industrial machinery was solid on the back of strong recovery of the global economy, a government official told reporters.

Meanwhile, imports grew 5.1 percent, partly due to the government's procurement of COVID-19 vaccines.

Business investment, another key pillar of domestic demand, grew 1.7 percent, and private residential investment rose 2.1 percent, both contributing to the reporting quarter's GDP growth.

Ideas:

The challenge, again, is these areas in the Japanese economy that are showing signs of growth have to keep increasing or keep growing. But except for exports, many areas of the economy don't show sustained growth from quarter to quarter.

And the biggest challenge, as its always been, even before the pandemic is consumer spending from quarter to quarter. 

Its not so much that there isn't growth in consumer spending its that consumer spending, for many reasons, never reaches its potential.

For example maybe because of the ageing population, which tends to spend less that those below the age of 65.

It could be the number of people who only have part-time jobs, or temporary jobs, or contract only jobs and as such the don't have a lot of extra or disposable income to spend on things other than their daily needs.

And then those who do have regular jobs, maybe they haven't received much of a raise in years, and they don't feel good about their income enough to spend extra in the economy.

And then the working women in the Japanese economy who are underemployed and not working in jobs up to their skill level, and as such don't feel good about their salaries and as such are not spending a lot in the economy.

And then you add in the pandemic factors and it makes it even worse for consumer spending to reach its potential in the Japanese economy.

Article:

"Postponed capital expenditure that many firms had initially planned in fiscal 2020 (through March) apparently began emerging this fiscal year," the official said, adding that digitalization and decarbonization-related investments are on the upward trend.

Government spending increased 0.5 percent, partly underpinned by purchase of vaccines, while public investment fell 1.5 percent as costs to build infrastructure declined.

Takayuki Miyajima, a senior economist at Sony Financial Holdings Inc., said consumption was better than analysts' forecast "partly because many people are believed to have gone out more frequently and spent more, especially in June when the emergency was lifted" in most of Japan. But he added that the level of personal consumption is still low.

Ideas:

If we look at what is called Keynesian economics, supposedly whenever the private sector is not where it should be then the government will step in to help the economy, wherever needed. 

So despite some increases in some areas of the private sector maybe the Japanese government should continue to help the economy as it doesn't look like the pandemic is going to end anytime soon.

But at the same time, some might say, the Japanese economy is now beginning to show enough signs of growth, that the Japanese government doesn't need to prop up the economy any more.

That might be true in some areas, but there might be many areas of the Japanese economy that is not doing very good.

Yes, consumer spending is picking up here or there, but not enough to really help the economy grow. Real consumer spending growth might not come until all of vaccinated and then that is no guarantee as the virus variants just keep coming, which might continue to limit consumer spending.

Article:

Since mid-July, Tokyo has been under a fourth state of emergency with recent record-breaking spikes in the number of daily new infections as the highly contagious Delta virus variant takes hold.

In addition to Okinawa and Tokyo, Osaka and three prefectures near the capital have been added to virus emergency, clouding the outlook for the world's third-largest economy achieving high growth in the current July-September quarter.

Miyajima said his firm had expected the economy to grow an annualized 2.8 percent in the July-September period and 5.6 percent in the following quarter, but the projection for the current quarter will be slightly downgraded following the latest GDP data and situation of the virus spread.

Ideas:

Even if the Japanese economy reaches an annualized 2.8 percent, again that doesn't mean every company and every industry in the Japanese economy grew 2.8 percent.

An economy is very complex with many different kinds of industries and companies, and even before the pandemic, in a market economy, not sector or industries grow the same. 

That is the nature of any economy, and as such some will grow or increase a lot and some will not.

And not you add in the pandemic and lot more variables affecting the economy overall.

Whenever, whomever, gives some kind of estimate, for the most part, they are just guesses, as no one can predict 100 percent what is going to happen in the future. 

Even before the pandemic it seems many different groups would always give different estimates for what might happen as they are just trying to take a guess as to what the economic growth will be.

Even with all of the big data analysis and all of the latest modeling software no prediction or guess is 100 percent. As you are dealing with people, and people are not always consistent as to what they will do in the future.

Article:

"Anyway, there is great uncertainty," he said, indicating that the estimated figures are subject to change depending on infection situations.

In nominal terms, or unadjusted for price changes, the economy grew 0.1 percent, or an annualized 0.2 percent, in the reporting quarter.

Revised GDP data is scheduled to be released on Sept. 8.

Ideas:

Exactly! Even the person admits the supposed estimates are just guesses as there is just too much uncertainty about the future.

So even if the Japanese economy grew 0.1 percent or an annualized 0.2 percent, did every citizen in Japan feel the growth? 

Maybe yes and maybe no, as again an economy is so complex, you might have some businesses see increases in sales and profits but then might see some businesses with losses and no profits, which is the norm in any economy.

So should anyone get excited about a 0.2 growth? Of course not because its not local, and might not show what or how it affected them.

Did keep their job, did they get a raise, did the company they work for do good or did the company they work for not do so good?

So that is the real economy. How companies do and how it affects people, not so much about about 0.2 growth. 

But any growth hopefully is a good sign.

Have a nice day and be safe!