Japan economy's vital signs dull in March, but views upbeat

By ELAINE KURTENBACH Markets Associated Press

Japan reports that its manufacturing output and household spending fell in March, while the jobless rate remained at a 22-year low.

Continue Reading Below

The data released Friday generally were slightly weaker than analysts had forecast, though the outlook for the world's third-largest economy remained upbeat.

Here are a few highlights from the data, and their implications:

FACTORY OUTPUT: Industrial output fell 2.1 percent from February but was up 3.3 percent from the same month a year earlier. But manufacturers were forecasting a relatively strong 8.9 percent increase in April.

INFLATION: Core inflation, which excludes volatile fresh food prices, rose 0.2 percent, well below the central bank's official target of 2 percent but still the third straight month of increase.

UNEMPLOYMENT: Unemployment was unchanged from February at 2.8 percent, while the number of jobs available per worker seeking work rose to 1.45, the highest rate since November 1990.

Continue Reading Below

WAGES AND HOUSEHOLD SPENDING: Household spending fell 1.3 percent from the month before and 2.0 percent from March 2016, while household average incomes adjusted for inflation fell 1.1 percent from a year earlier. Anemic growth in wages and worries over future cuts to pensions and other social spending are constraining the consumer spending that drives growth in Japan.

OUTLOOK: In a policy statement issued Thursday, the Bank of Japan said it expected steady growth in the coming year. It said the economy was in a "modest expansion" helped by a recovery in exports and increased public works spending ahead of the 2020 Tokyo Olympics.