Japan's latest GDP figures appear to support the government's view in last month's economic report that "signs of recovery are discernible in some sectors." In the April-June quarter, total output of goods and services increased 0.5 percent from the previous quarter, or 1.9 percent annually. It is the first time in 15 months that a positive rate of growth has been recorded quarter to quarter.
But that is hardly encouraging. Compared with a year earlier, GDP slipped 0.9 percent, attesting to continued weakness in the economy. Exports accounted for more than half of second-quarter growth; internal demand remained anemic. Consumer spending rose only slightly. Business investment, housing starts and public works projects continued to drop.
The worsening of the economic picture is due partly to the adoption of more accurate methods for calculating GDP. The new rules cover not only statistics on the demand side, such as household spending, but also numbers on the supply side, such as industrial shipments and commercial sales. The idea is to keep closer tabs on overall consumption.