What is going on in Japan, or, more precisely, not going on? Market economies want to grow, unless they’re pushed down by something (think of a cork bouncing to the surface of your bathtub unless you keep pushing it down).
- GDP fell at 1.4% pace in Oct-Dec.
- This is the eighth quarter of the last 16 in which GDP has fallen
- GDP still 0.4% below pre-recession peak almost eight years ago
- At this point, Japan’s recovery from 2008-09 slump no better than in Eurozone
- US, UK and Germany all doing substantially better than Japan
- Biggest hit to growth is ongoing slump in consumer spending; spending even lower than it was almost four years ago in Jan-March 2012
- Artificial stimulus of spending on consumer durables has gone into big reverse
- Second arrow missing in action as government spending flat for last two years