Courtesy of Mish.
Complete Failure of Abenomics
Abenomics is back in the spotlight tonight. Results show a complete failure on three fronts: retail sales are down, factory output is back in contraction, and the most humiliating of all, Japanese firms have outright rejected Prime Minister Shinzo Abe’s plea for higher wages.
Retail Sales Decline, Factory Output Contracts
Please consider Japan output, retail sales slump, dampen recovery prospects.
Japan’s factory output fell for the first time in three months in November and retail sales slumped, suggesting that a clear recovery in the world’s third-largest economy will be delayed until early in 2016.
While manufacturers expect to increase output in coming months, the weak data casts doubt on the Bank of Japan’s view that an expected pick-up in exports and consumption will help jump-start growth and accelerate inflation toward its 2 percent target.
Industrial output fell 1.0 percent in November from the previous month, more than a median market forecast for a 0.6 percent decline, data by the trade ministry showed on Monday.
Separate data showed that retail sales fell 1.0 percent in November from a year earlier, more than a median forecast for a 0.6 percent drop, as warm weather hurt sales of winter clothing.
Wary of soft growth, the government plans nearly $800 billion in record spending in the budget for the fiscal year that will begin on April 1.
The BOJ has signalled readiness to expand stimulus if risks threaten Japan’s recovery prospects. The central bank fine-tuned its stimulus programme on Dec. 18 to ensure it can keep up or even accelerate its money-printing.
Fine-Tuning
Damn that weather. It’s always too hot, too cold, or too perfect for retail sales.
The only possible conclusion is central banks need to fine-tune the weather to get predictable outcomes….
