Economy Watchers Index down again in July

September 10, 2008
By Ken Worsley

A few days ago, the Nikkei published an article stating that a recovery in the Economy Watchers Survey might help stock prices bounce back. I wrote why I didn’t think any increase in the Economy Watchers Survey would happen in July, although an eventual increase is bound to happen should fuel prices continue to subside.

Yesterday, the Cabinet Office announced that the Economy Watchers Survey index fell 1.0 point from a month before, to 28.3 points. The index has thus been below the 50 point mark for seventeen months in a row and is now at its lowest level since October 2001. The Economy Watchers survey is measured as an index with a score above 50 indicating a positive view of the economy and a score below 50 representing a pessimistic overall view.

Again, the highest score was seen in the sub-index of service industry workers, at 31.9 points. The service industry was the only sector with a score over 30. Perhaps unsurprisingly, the lowest score came from workers in the real estate industry, at 25.6 - though this score was up 1.2 points from the previous survey.

Nonetheless, we did see a boost in the Nikkei on Monday. The Nikkei 225 climbed 412.23 points on Monday, on news that the US government is set to bail out Freddie Mac and Fannie Mae - so it seems fairly certain that news from the US still overrides domestic sentiment. On Tuesday, however, the Nikkei fell 223.81 points - despite Wall Street’s Monday bounceback.

Filed Under Business, Cabinet Office, Economic Reports, Economy Watchers

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