GDP raises warning flags
(From The Japan Times Nov. 26 issue)

日本経済の先行き

The nation's gross domestic product in the July-September period grew an annualized 2.6 percent from the previous quarter — more than economists expected. This was a rebound from the 1.6 percent contraction in the previous quarter.

About 1,200 major companies listed on the first section of the Tokyo Stock Exchange saw figures for sales and recurring profits in the April-September period grow an average 8.6 percent from the preceding six months. Net profits increased 19.2 percent. Depreciation of the yen against the dollar and the euro, and strong overseas economies helped Japan's exports grow 2.9 percent in the third quarter.

But optimism cannot be warranted for the Japanese economy. Although the effect of the subprime mortgage crisis in the United States was not obvious in the July-September period, confusion in the financial market caused by the problem is likely to cast a cloud over businesses. The gradual appreciation of the yen and a downtrend in U.S. consumer spending could depress profits of Japanese companies that rely on exports.

While capital investment increased 1.7 percent in the third quarter, housing investment declined 7.8 percent — the largest drop since the 11.1 percent fall in the April-June 1997 quarter — mainly due to the introduction of a strict quake-resistance standard. This trend may continue.

Crude oil prices are likely to stay at a high level as investment funds continue to flow into the crude market. In addition to petroleum products, including gasoline, prices of other daily necessities such as food are rising. Consumer spending, which accounts for more than half of the nation's GDP, increased 0.3 percent in the July-September period. But the price increases are likely to slow down consumer spending.

Wages are not rising. The average monthly wage paid in September by enterprises employing five or more people dropped by 0.6 percent from the same month a year before. Trends in consumer spending and housing investment, and the effect of the subprime fiasco on the real economy, must be closely watched.

7〜9月期の国内総生産の速報値は、前期比、年率で2.6 % 増、前期の1.6 % 減から反発した。

一方、東証1部上場の1,200社は4〜9月期の売上、経常利益が前期比、平均8.6 % 増を記録した。純益は19.2 % 増。円安と、海外経済の好調で、第3四半期の輸出は2.9 % 増となった。

しかし、日本経済の今後にについて楽観は許されない。米サブプライムローン問題の影響は7〜9月期にははっきりしなかったが、問題の金融市場への影響は今後、経済に暗雲を投げかけるだろう。円高傾向、米国の消費支出の減少は、輸出依存型企業の利益を減らしかねない。

第3四半期の設備投資は1.7 % 増だったが、住宅投資は、7.8 % 減となった。原油価格は高レベルで推移すると予想される。ガソリンなどの石油製品、食品なども値上げが続いている。

賃金は伸び悩んでいる。従業員5人以上の企業の9月の平均賃金は、前年比0.6 % 減となった。サブプライム問題などの実質経済に対する影響は慎重に見守る必要がある。