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By HaleStewart August 13, 2014 5:21 pm
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There Is No Silver Lining in the Japanese GDP Report

The latest GDP reading from Japan contains nothing but ugly numbers. 

The headline annual GDP growth rate is -6.8%.  While analysts have stated they were expecting this number as a result of the sales tax increase earlier this year, that really doesn’t provide enough of a balm to the terrible number.  In addition, none of the internals are positive.  Private consumption dropped 18.7% at an annual rate while residential investment crated at 35.3% (again, annual).  And non-residential’s annual rate was -9.7%.  Simply put, this is a really ugly report.  Here is the primary table from the release:

Consider the following points about chained data (using 2005 as the base year).

  1. Overall GDP growth dropped .13% from year ago levels. 
  2. Overall private consumption printed its lowest level since 2Q11
  3. Private residential investment printed its lowest level since 2Q12

There is no good way to spin this.

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer 

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