Why does the author of your article not mention that the very same statistic registered the highest ever reading of 7.2% in March 2014? Or the fact that, during the years immediately before the tax hike, the average increase in household spending stayed meaningfully positive for the first time since the 2006 bull mkt? Or neglect to mention that the latest 5.9% drop is in real terms which double-counts the effect of the VAT hike? Ideological bias isn't really a good thing for someone who purports to be an economist. Would you like me to post what I think is a reasonably balanced write up?
I wonder what the authors of the articles you have linked would say about this: http://online.wsj.com/articles/japan-wages-make-biggest-jump-in-17-years-1409624572 "TOKYO—Japanese wages rose at their fastest pace in over 17 years in July, tempering concerns about the strength of the nation's economic recovery. Data released by the Ministry of Health, Labor and Welfare Tuesday showed that total average monthly wages for regular employees jumped 2.6% on year during that month to ¥369,846 ($3,544) on the back of a rise in bonuses in the manufacturing and construction sectors. That was the biggest jump on month since January 1997, and the fifth straight month of increase..."
Oh, I'm quite sure I could guess to what you, Champion of the Federal Reserve and Defender of all that is QE, would consider reasonably balanced!
Actually, I just realized that I've already posted the piece I am referring in an older thread, so there's no need to link it again.
If the US equity market's reaction to the worst jobs data of 2014 is anything to go on; Japanese stocks should be a double overnight given the catastrophe that just printed. While the initial prints for the post-tax-hike period were bad enough (record worst levels in most cases), the revsions are even worse. Drum roll please: 1) Trade balance miss, worst in 4 months; 2) GDP -7.1% miss, revised down, worst since Q1 2009; 3) Business Spending/Capex -5.1% miss, revised down, worst since Q2 2009; and 4) Consumer Spending -5.3% miss, revised down, worst on record. But apart from that, as the Japanese leaders noted last week, "the recovery is heading in the right direction." Charts: Bloomberg * * * A gentle reminder why Abenomics will never work... (or the terrible missing J-Curve via Patrick Barron of the Ludwig von Mises Institute of Canada): And as Goldman noted, why the "money illusion" is failing... In making an assessment of the economy, however, we sound a note of caution about overplaying the positive effects of a small increase in nominal wages in an inflationary climate. We believe the outlook for consumption should focus on the more negative effects of declining real wages. In addition, once people wake up to the illusion of money, its impact will also fade.
Shall we see how it plays out? I hesitate to suggest this, given our history on such subjects, but shall we have a friendly wager?