Tuesday, January 30, 2007
Fall in Japanese consumer spending
Japanese household spending fell 1.9% in December, the 12th drop in a row, prompting fears slow wage growth means shoppers are unwilling to spend. Meanwhile, the jobless rate rose to 4.1% from 4.0% in November. The fragility of domestic consumption has prompted government worries about choking the economic recovery should they decide to raise interest rates.
Read the full story at:
http://news.bbc.co.uk/1/hi/business/6312231.stm
Consumption is a key component of aggregate expenditure, and hence a fall in consumer spending will feed through to a fall in GDP. If the government were to raise interest rates, this would reduce investment (another key component of aggregate expenditure), further reinforcing the recessionary trend.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. The effects of changes to consumption and investment is explained in chapters 4 and 9 (at principles and intermediate level, respectively). Find out how to get LiveEcon at www.liveecon.com Download this blog as a Blogcast via the website.
Japanese household spending fell 1.9% in December, the 12th drop in a row, prompting fears slow wage growth means shoppers are unwilling to spend. Meanwhile, the jobless rate rose to 4.1% from 4.0% in November. The fragility of domestic consumption has prompted government worries about choking the economic recovery should they decide to raise interest rates.
Read the full story at:
http://news.bbc.co.uk/1/hi/business/6312231.stm
Consumption is a key component of aggregate expenditure, and hence a fall in consumer spending will feed through to a fall in GDP. If the government were to raise interest rates, this would reduce investment (another key component of aggregate expenditure), further reinforcing the recessionary trend.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. The effects of changes to consumption and investment is explained in chapters 4 and 9 (at principles and intermediate level, respectively). Find out how to get LiveEcon at www.liveecon.com Download this blog as a Blogcast via the website.
# posted by Sam @ 16:44 
