Wednesday, 29 December 2004

US economic outlook good but Japan's mixed

The economic outlook for the US continues to be better than for Japan.

The Conference Board in the US reported yesterday that its Consumer Confidence Index has rebounded in December and now stands at 102.3, up from 92.6 in November.

Meanwhile, in Japan, following the previous day's industrial output figures, the economic indicators reported yesterday were mixed.

The unemployment rate fell to 4.5 percent in November from 4.7 percent in October as the number of people out of work dropped 400,000 to 2.9 million. Full-time employment rose 0.6 percent in November, the eighth consecutive monthly rise. Part-time work increased 2.6 percent, lower than the rise of 4.0 percent in October.

Spending by salaried workers' households in November fell 0.7 percent year-on-year after a gain of 0.1 percent in October. Overall income at salaried households was up only 0.5 percent compared with a year earlier.

At the same time, deflationary pressures persist. November core consumer prices, which exclude fresh food costs but include energy, were down 0.2 percent year-on-year and fell 0.3 percent from October.

These data indicate to me that further strengthening of the yen against the US dollar is warranted.

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