2010-05-28

日本に問題がある

Japan Economic Data Worsens
The nation's core consumer price index, which excludes volatile fresh food prices, fell 1.5% from a year earlier in April, compared with a 1.2% slide in March, the Ministry of Internal Affairs and Communications said.

One factor in the fall in consumer prices was the elimination of public high school tuition in the month, one of the ruling Democratic Party of Japan's measures to free up cash for consumers to spend elsewhere.

But the drop in the core CPI was still the 14th in a row and missed the median forecast for a 1.4% decline forecast by private economists, adding to evidence that the current economic recovery has yet to help boost domestic demand and prevent prices from decreasing further.

The jobless rate increased for the second straight month to 5.1% in April from 5.0% a month earlier. Overall household spending slipped 0.7% on year in real terms during the same period with income conditions worsening, posting the first decline in two months, the internal ministry said.
Japan's jobless rate peaked at 5.6% during the deep recession of 2008-2009. Deflation is very bad for Japan because of their debt. While the economy is growing on a per capita basis (see this article for a different look at Japan's economy), their nominal GDP is declining and this means their debt burden is increasing. On an individual level, imagine you earn $100,000 per year and have $100,000 in debt and your costs of living are $80,000 before a big deflation. After, your salary drops to $10,000 a year and your cost of living drops to $6,000 per year, leaving you much better off...but you still owe $100,000.

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