still, given the historically high levels of profits and cash flow, the current level of business fixed investment appears too modest. this cautious corporate behavior contributes to the mild and long - lasting recovery. however, as the economy continues to recover and the business outlook becomes brighter, an increasing number of firms are likely to start earmarking more cash flow for business fixed investment, the wellspring of their future profits, with their focus on maximizing corporate value. we will examine the robustness of business conditions, by using, for example, the results of the september tankan ( short - term economic survey of enterprises in japan ), which will be released in early october. 1 / 4 now turning to the household sector, the employment and income situations appear to be improving steadily after a prolonged period of difficulty, as a result of firms'efforts to reduce excesses in the workforce and personnel expenses. the number of employees has been increasing since last year. more recently, the number of full - time employees has begun to increase, while the rise in the number of part - time employees, who were more in demand when corporate restructuring was in full swing, has slowed. regular payments are steadily increasing and bonus payments for this summer have also increased. given such improvement in the employment and income situations, private consumption has been firm, and is on an upward trend, albeit with some fluctuations. although sales of automobiles and sales at department stores were slightly weak in july and august, this was mainly in reaction to the substantial increase in sales during the april - june quarter, and the upward trend in private consumption remains intact. of course, risk factors do exist and ought to be taken into account in assessing an economic outlook. we should pay attention to the protracted surge in crude oil prices and its possible effect on overseas economies, including that of the united states. crude oil prices, which have been rising for the past few years, marked a record high around the end of august. rises in crude oil prices entail the risk of deceleration of world economic growth as a result of declines in the real purchasing power of non - oil producing countries. so far, however, the world economy continues to expand at a robust pace and shows no sign of this risk materializing. there are several reasons for this. first, the recent rises in crude oil prices have not been caused by oil production capacity constraints. rather, they are to a large extent attributable to an expansion of demand mainly in emerging countries,

on - year rate of change in the cpi excluding fresh food and energy, which more clearly shows the underlying trend in prices, has generally continued to be positive for more than five years since mid - 2013. although the cpi has continued to show relatively weak developments compared to the economic expansion and the labor market tightening, the economy at least no longer has been in deflation over the past few years in the sense of a sustained decline in prices. recent economic developments and risks concerning overseas economies as i just outlined, japan's economic activity and prices have improved significantly over the past six years. currently, the economy is continuing its moderate expansion. although the real gdp growth rate for the july - september quarter of 2018 was negative on a quarter - on - quarter basis, this likely is mainly because of the series of natural disasters, which temporarily have exerted downward pressure on such components as exports, production, and tourism. in fact, looking at developments since october, these components have started to increase again after the decline in the july - september quarter ( chart 7 ). as for the outlook, japan's economy is likely to continue its moderate expansion. regarding this outlook, however, it is necessary to bear in mind that uncertainties have recently been growing, mainly with respect to developments in overseas economies. in particular, it is necessary to pay close attention to recent protectionist moves, including the trade friction between the united states and china. while the results of the recent tankan ( short - term economic survey of enterprises in japan ) show that the impact of this problem on japan's economy so far likely has been limited, some firms have voiced that it is difficult to accurately gauge the potential impact at this point given that economies have become increasingly interdependent through global supply chains. protectionist policies clearly do not benefit any economy, and it is likely that a brake will be put on excessive protectionist moves at some point. however, if we regard this problem of trade friction as part of the broader issue of determining the future relationship between the united states and china, it is undeniable that resolving the trade friction may take time. in this case, there is also a risk that the impact of this problem on trade activities and economic activities in various economies could become complex and broad - based, and that, depending on future developments, the negative impact could be amplified through a deterioration in business sentiment and instability in financial markets. attention also needs to be paid to other risks originating from overseas economies such as