"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Tuesday, December 28, 2010

Turning Japanese

Japan reported a massive load of economic data last night, enough that I'm not even going to play the "this is what was expected and this is what we got" game. Brace yourselves for a data dump.
CPI was nothing short of spectacular, falling 70 bps from 0.4% in October to -0.3% in November (and probably fueling deflationary fears). Core CPI fell 90 bps from 0.7% in October to -0.2% in November.
Household spending for a rolling twelve month period continued a downward trend. It was at -0.4% from October 2009 to October 2010, and was down another 0.4% from November 2009 to November 2010. Most of that drop was driven by clothing (down 7.8%), medical care (down 6.7%) and food (down 2.8%), balanced slightly by increases in spending on culture & recreation (up 14.9%) and housing (up 13.3%).
Unemployment stayed level from October to November, at 5.1%.
Industrial production increased 280 bps from October to November, climbing from -1.8% to 1.0% (that's rate of change; October saw production fall 1.8%, while November saw it rise 1.0%). The rolling year production rate increased as well, from 4.5% to 5.8%.
Retail sales climbed 150 bps, from the October year-over-year -0.2% to the November year-over-year 1.3%. I don't quite follow how household spending and the CPI can both decrease, only to see retail sales climb, but that's what happened.
Overall, the news was mixed. The Nikkei 225 seems to reflect that, with Bloomberg showing it closing down 0.61%,

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