Despite its continuous expansion, Japan's economy remains fragile. Personal consumption is sluggish and a serious gap exists in wages and other working conditions between regularly and irregularly employed workers. Major manufacturing companies may be enjoying strong performances, but that is not necessarily so for nonmanufacturing and smaller-size companies. While economies in industrial areas like Tokyo and Nagoya prosper, local economies in many prefectures are weak.
The current period of expansion entered its 59th month in December to become the longest post-World War II "boom," surpassing the 57-month-long Izanagi boom from November 1965 to July 1970. But the people aren't reaping the benefits of the boom because it has not been accompanied by wage increases or strong consumption.
The government's task for 2007, therefore, is to get the fruit of the corporate sector's success to spill over into the household sector and eradicate various gaps in the economy. Increasing personal consumption will be especially important since it accounts for slightly less than 60 percent of the nation's gross domestic product.