Recent economic reports indicate the nation has finally pulled itself out of a decade of doldrums.

In retrospect, it appears the recession ended in the first half of 1999, with industrial production picking up. Capital investment has turned visibly higher in recent months, paced by increased spending in information technology.

Many companies are now forecasting double-digit increases in pretax profits for the current business year to March on top of sizable profits the previous year. But when it comes to consumer sentiment worries remain.

Industrial restructuring programs have forced many workers out of jobs, clouding prospects for household income. Since consumer spending accounts for two-thirds of the nation’s overall economic activity, as long as it refuses to turn higher, the nation’s households will remain cautious about economic prospects.

Although there is little dispute that the economy has regained its footing, the recovery seems tenuous.

Other downside factors are the changes enacted to the corporate accounting method for fiscal 2000, the final phase of the nation’s “Big Bang” financial reforms under way since fiscal 1996. The revised book-keeping system is forcing corporations to press forward with their restructuring programs. The new method is calling for a switch to bookkeeping on a consolidated and market-price basis.

Corporations are also required to revise their method of evaluating real estate for sale and keep records on reserves for employee retirement allowances. Basically, the changes are aimed at increasing the transparency of corporate fiscal strength.

Since companies are no longer allowed to put off writeoffs of latent losses on their real estate holdings, sweeping restructuring efforts could have a negative impact on the economy.

On the stock market, companies getting behind others in pushing for restructuring could be shunned. Shares of financial institutions that are forced to grant debt waivers would remain under downward pressure.

Under such circumstances, it would be sometime before the economic recovery gathers momentum.

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