The huge string of unexpectedly sour economic data continues to pour in. Add Japan to the spotlight. The BBC reports Japan’s Quarterly Growth Disappoints Ahead of Sales Tax Hike.
Japan’s economy grew less than expected last year, despite forecasts it would benefit from a jump in spending ahead of a sales tax increase in April.
Gross domestic product rose by 1% on an annualized basis in the three-month period to December, compared to market estimates of a 2.8% expansion.
This was due to weaker private consumption and capital spending, as well as lower export figures.
Mr Abe also pushed through a controversial sales tax increase last year, in an attempt to raise funds to reduce the country’s large public debt.
However, Japan’s GDP is forecast to shrink in the April-to-June period because of the increase in the consumption tax to 8% from 5%.
The global economy is seriously slowing just as Abe pushed through a massive income tax hike. Yet people still sing the praises of Abenomics.
I fully expect Abe to step up to the plate with further measures to sink the yen in still more futile efforts to boost exports.
For other “unexpected” news, please see …
- The unexpected decline in industrial production (the most since May of 2009)
- Followed the unexpected decline in retail sales which in turn followed
- The unexpectedly weak jobs report in February
- Which followed a Huge Miss in ISM; Largest Decline in New Orders in 4 Years
- Which followed a Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected in January
The unexpected now hits Japan. Is Japan having bad weather too?
Mike “Mish” Shedlock
