Bloomberg is reporting:
Japan’s economy contracted more than the government initially estimated, highlighting the challenge for Prime Minister Shinzo Abe in steering the nation through the aftermath of a sales-tax increase.
Gross domestic product contracted an annualized 7.1 percent in the three months through June, more than a preliminary reading of a 6.8 percent fall, the Cabinet Office said today in Tokyo. The median forecast of 25 economists surveyed by Bloomberg News was for a 7 percent drop.
The blow from the sales-tax hike in April extended into this quarter, with retail sales and household spending falling in July. The government signaled last week that it is prepared to boost stimulus to help weather a further increase in the levy scheduled for October 2015.
“The negative impact on demand was bigger than people initially thought in the second quarter and it’s casting a shadow over the third quarter too,” Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the report.
“A recovery is underway this quarter but the momentum may be sluggish.”"A recovery is underway." Sounds like the same spin we get here in the states.
Back on June 28, 2014, I wrote:
As I've said many times, any news article on the economy that fails to mention the 800-pound gorilla in the room is less a news article and more an op-ed disguised as a news article. During a recession/recovery, the worst thing a government can do (see The Grand Pursuit, Sylvia Nassar) is increase taxes and ObamaCare was the biggest tax increase this country has seen in quite some time, and maybe the biggest tax increase if one took the time to add up the effects of national health care as it permeates through the entire economy. The three biggest business concerns with ObamaCare: a) uncertainty; b) 50-full-time-worker threshold; and, c) 29-hour work week.Forget the part about ObamaCare. Reflect on the part about increased taxes and how that applies to Japan.
Oh, well.
