countries intensified. turning to the household sector, there has been a drastic change in consumption activities between those up until the beginning of 2022 and those thereafter. specifically, a pick - up in consumption of both goods and services became evident from late december 2021 through early january as people were more willing to be out and about, including the elderly, owing to the lifting of the state of emergency at the end of september, including in kyoto prefecture. however, at the turn of 2022, the outbreak of the omicron variant led many prefectures to implement priority measures to prevent the spread of disease. thus, consumption, mainly for services, has been pushed down temporarily ( chart 5 ). the employment and income situation remains relatively weak on the whole, although improvement has been seen in some parts. to be specific, the number of regular employees and the amount of scheduled cash earnings continue on a moderate uptrend, and there have also been improvement in job openings for non - regular employees reflecting the resumption of face - to - face service operations ; however, employee income remains at a relatively low level ( chart 6 ). i will be keeping track of whether developments in job vacancies actually result in an increase in the number of non - regular employees, which has been on a downtrend. given these economic developments, the real gdp growth rate ( the first preliminary estimate ) for the october - december quarter of 2021 moved markedly into positive territory, increasing by 1. 3 percent on a quarter - on - quarter basis, and 5. 4 percent on an annualized basis - - marking a clear pick - up from a somewhat large negative growth rate for the july - september quarter, which was minus 0. 7 percent on a quarter - on - quarter basis, and minus 2. 7 percent on an annualized basis. since january 2022, however, the situation remains highly unpredictable due to the impact of covid - 19. b. outlook regarding the outlook, japan's economy is likely to recover as downward pressure stemming from covid - 19 on services consumption and the effects of supply - side constraints wane, while being supported by the increase in external demand, accommodative financial conditions, and the government's economic measures. to elaborate a little, in the corporate sector, exports and industrial production are likely to return to a clear expansionary trend. this will be propelled by the receding impact of automobile - related production cuts expected to be seen around the end

bank of japan ’ s december review of monetary and economic trends in japan bank of japan, communication, 22 / 12 / 97. japan ’ s economic growth has stalled. weak household expenditures have gradually affected production, employment and income. corporate sentiment is also deteriorating. with respect to final demand, net exports have continued to increase and business fixed investment has been rising moderately, particularly in the manufacturing sector. meanwhile, public - sector investment has been decreasing, and housing investment has also continued to be weak. personal consumption has continued to stagnate, reflecting weakening consumer confidence. industrial production has been on a slightly declining trend because inventory adjustment pressure has spread gradually reflecting weak final demand. the pace of improvement in employment and income conditions has been slowing. prices have remained stable on the whole, with the exception of wholesale prices which have declined somewhat. monetary aggregates continue to grow at around 3 per cent. personal consumption has continued to stagnate. although outlays for travel have been increasing moderately, passenger car sales have fallen significantly below the level recorded in the second half of fiscal 1996 when sales surged, and have not even recovered the levels recorded before then. the recovery in sales of household electrical appliances has paused and sales at department stores and supermarkets have remained below the previous year ’ s level. among leading indicators of business fixed investment, machinery orders continued to increase since early 1997 after having surged in the second half of 1996. recently, orders from nonmanufacturing firms have been weak, however. construction floor area has followed a moderate recovery trend, albeit with some fluctuations. according to the bank of japan ’ s tankan - - short - term economic survey of enterprises of december, investment growth in the principal nonmanufacturing firms for fiscal 1997 is projected to be lower than that in fiscal 1996, while growth in the principal manufacturing firms is planned to be higher than that in the previous fiscal year. this makes the growth of investment plans in principal firms overall the same as the previous year. meanwhile, overall investment plans by small firms in fiscal 1997 are lower than those for fiscal 1996. this is because investment plans of nonmanufacturing firms fell significantly below the previous year, although plans of manufacturing firms at this time of the fiscal year grew at a somewhat higher pace compared to fiscal 1996. with respect to housing investment, housing starts in terms of the seasonally - adjusted annual rate declined in july to 1. 24 million, the lowest level since september 1985, following the surge in demand in