The Japanese economy, in terms of demand, shows that personal consumption remains generally unchanged while household income has improved slightly. Housing investment declined somewhat in the most recent month, as starts of owner-occupied houses fell, after rising for the past few months. Business investment continues to rise, led by buoyant outlays by manufacturing firms. Public investment remains lower than in the previous year. Industrial production continues to rise steadily.
Corporate profits continue to rise markedly.
The improvement in business confidence has slowed down, with some firms becoming cautious about the immediate future. On the other hand, the number of business failures has stayed somewhat high, with gross debt of failed firms rising. Although the slack in the labor market has diminished little, as exemplified by the rather high unemployment rate, improvements continue to be seen in the growing number of job offers and in the rising trend of overtime hours worked. Exports have remained broadly unchanged. Imports are rising moderately.