At the same time, employment has exhibited a steady downward trend since mid-1997, falling a full 2 percent for a loss of almost 1.2 million jobs. While production may be on the upswing, this turnaround has not affected the total number of people working. One reason is that manufacturing accounts for only about 25 percent of economic output in Japan. Another is that firms in all industries are attempting to become more efficient, which means greater output with fewer inputs. Expectations for an economic recovery rest on consumers.
Consumption generates more than three-fifths of aggregate demand in Japan.
With corporate investment unlikely to return to past shares of total demand and government outlays running into budget-constraining limits, all analytical eyes are on consumer spending. The disposable income of workers' households and their spending are shown in Figure 3. These figures do not cover the whole economy. Moreover, the consumption data often do not scale up to the aggregate reported in Japan's national income accounts. Nonetheless, the estimates presented of consumer spending are the only monthly series available, and the trend over the longer term is not inconsistent with broader figures.