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To: joseffy who wrote (32837)	1/30/2007 10:04:26 AM
From: Bucky Katt	Read Replies (1) \| Respond to of 48462

How about this?> Japan household spending continues fall: Japan’s consumption remains weak even though businesses are employing more people and buying more capital equipment, a series of data released on Tuesday shows. The jobless rate for 2006 fell to an eight-year low of 4.1 per cent from the previous year, compared with a peak of 5.4 per cent in 2002. Production rose a faster-than-expected 0.7 per cent in December, bringing the annualised rise in the fourth quarter to an impressive 11 per cent. However, average monthly spending fell for the 12th straight month, dropping 1.9 per cent in December over the same month the previous year. Although the household spending survey is notoriously unreliable, it confirms a trend noted in output data showing weak consumption for much of last year. Tuesday’s numbers confirm a growing economic - and political - headache for the government, which is concerned that the man on the Tokyo subway feels no richer after five years of growth. Last month, Shinzo Abe, the prime minister, told businesses they should pass on some of their record profits to workers in the form of higher wages. Masakazu Kubota, managing director of Keidanren, Japan’s powerful business lobby, said Tuesday that it was not the responsibility of businesses to lift pay and consumption. He blamed continued deflation - conquered according to the Bank of Japan - for consumers’ continued reluctance to spend. “I don’t think there’s a backlash against business,” Mr Kubota said, referring to accusations from politicians and commentators that companies were unnecessarily suppressing wages. “It is up to the company to decide on wages.” Late last year, the ruling Liberal Democratic party ditched proposals for a corporate tax cut on the grounds that the public would not tolerate favouring businesses already perceived to be prospering. Hiroshi Shiraishi, economist at Lehman Brothers, said he expected the divergence between strong corporate health and weak wages and consumption to persist. Companies were taking a bigger share of profits worldwide, he said, but the trend was particularly stark in Japan where the component of more demanding foreign shareholders had increased sharply in the 1990s. “Corporations are increasingly more focused on the shareholder,” he said. “Especially at big companies, the workers’ share of corporate earnings is dropping very sharply.” Second, said Mr Shiraishi, high-paid babyboomers born after the war were beginning to retire in large numbers and were being replaced by much lower-paid graduates. That trend would continue for several years, suppressing wages, he said. ft.com