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Cabinet Office: Economy Watchers Survey up for seventh straight month in July

Earlier today, the Cabinet Office released the results of its monthly Economy Watchers Survey, and the results showed a 0.2 point increase to 42.4 points.

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. The survey measures sentiment amongst taxi drivers, restaurant staff, barbers, and other service industry workers sensitive to frontline economic conditions. The index itself has now been below the 50 mark for the past 27 months. Read more

Economy Watchers Index down to new all-time low in November

After having fallen to an all-time low of 22.6 in October, Japan’s Economy Watcher’s Survey showed a fresh all-time low of 21.0 in November, according to a report released today by the Cabinet Office. The index has now fallen for eight straight months.

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. The survey measures sentiment amongst taxi drivers, restaurant staff, barbers, and other service industry workers sensitive to frontline economic conditions. The index itself has now been below the 50 mark for the past 20 months. Read more

Economy Watchers Index down to second lowest reading ever in September

On Wednesday, the Cabinet Office announced that the Economy Watchers Survey index for September fell 0.3 points from a month before, to 28.0 points. The index has now fallen for six straight months, and was the second-lowest score ever recorded, following the 27.2 reading from 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. The survey measures sentiment amongst taxi drivers, restaurant staff, barbers, and other service industry workers sensitive to frontline economic conditions. The index itself has been below the 50 mark for 18 consecutive months.

Once again, the highest score was seen in the sub-index of service industry workers, at 30.2 points. The service industry was the only sector with a score over 30, though this score fell 1.7 points from August. The real estate industry no longer claims the lowest score, having risen 4.1 points to 29.7. The lowest score came from the food industry, which checked in at 23.9 points, plunging 4.9 points from a month before.

Lower oil and gasoline prices, however, have helped bring about a sliver of good news: The outlook sub-index rose for the second month in a row from 32.0 in August to 32.1 in September.

Economy Watchers Index down again in July

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.

Nikkei on the upcoming Economy Watchers Survey and government stimulus

A bit of an odd article came out of the Nikkei this morning, with the title Rise In Econ Watchers Confidence Could Boost Stocks. The Economy Watchers Survey is released each month by the Cabinet Office, and gauges sentiment amongst service industry workers close to the “front line” in various sectors. The survey itself has taken a beating this year, and last month slid for the fourth month in a row to its lowest levels since late 2001.

Because the EWS is an index and is not measured year-on-year, there are bound to be occasional surprising results, such as when the survey reported a slight uptick in March of this year. Still, the main score has been below the boom-or-bust level of 50 for 15 consecutive months, and with a score of 29.5 registered in June, it’s difficult to imagine anything too much higher than 30 showing up in the July reading.

Speaking of the July reading, it’s not due to be published for another five days, so why the speculation? Here’s what the Nikkei had to say:

The Economy Watchers Survey for August may serve to lift stocks if the latest data, to be published Monday, shows an improvement in the diffusion index for economic conditions.

Perhaps, though many other factors would be at work, and this doesn’t show slam-dunk causality. But what if the survey shows a decline yet again?

But if the gauge marks the fifth consecutive month of decline, calls for government action to stimulate the economy will likely mount.

Ahh. That might be the real message. The last week of August was washed out with rain, which most likely dissuaded consumers from doing a lot of shopping - and 25% of Japan’s department store sales happen in the Tokyo area. Although household spending fell by just 0.5% in July, this July was fighting against one of the stronger months from 2007. Given that the Economy Watchers survey is done from the 25th to the end of each month, right in the middle of all that rain, I don’t see sunshine coming from next week’s figures.

And yes, I’m buying the weather excuse this time.

Economy Watchers Survey down in June, to lowest level since 2001

After having seen a slight recovery in March, the monthly Economy Watchers Survey declined 1.4 points to to 35.5 in April, and then 3.4 points to 32.1 in May. According to the Cabinet Office, that figure fell 2.6 points further to 29.5 in June. This survey measures sentiment among workers who are particularly sensitive to economic trends, including taxi drivers, hotel staff and restaurant workers.

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. It has now clocked in below the 50 mark for 15 consecutive months. June’s 29.5 is the lowest score seen since 27.2 was registered back in October of 2001, and it was the first time the index slipped below 30 since November of that year.

All subindexes of the survey showed a decline, with the services sector showing the strongest downward pressure, by 4.6 points to 30.3. Food and dining related workers reported the lowest score, at 26.8. Read more

Economy Watchers Index down in April; Restaurants to hike prices

After having seen a slight recovery in March, the Cabinet Office announced on Monday that its monthly Economy Watchers Survey had seen a decline from 36.9 in March to 35.5 in April. This survey measures sentiment among workers who are particularly sensitive to economic trends, including taxi drivers, hotel staff and restaurant workers.

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. Although April’s 35.5 score is below what was seen in March, it is slightly better than the scores registered in February (33.6) and January (31.8), when the survey hit its lowest level since December 2001. April 2008 was the 13th consecutive month with a score below 50.

One worrying sign is that the survey’s employment subindex dropped from 35.5 in March to 33.6 in April, which is its lowest level since February 2002.

In related news, a recent Nikkei survey found that 58% of restaurant operators plan to raise their prices in fiscal 2008. This would be an increase from the estimated 53% that raised prices in FY2007.

If that news has you down, 12% of pub and bar restaurants said that they intend to cut prices in FY2008.

Economy Watchers Index dropped 4.8 points in January, at lowest point since December 2001

Each month, the Cabinet Office releases its Economy Watchers Index, a survey measuring sentiment among workers who are particularly sensitive to economic trends. This group includes taxi drivers, hotel staff and restaurant workers. January’s data was released late last week, and the results showed a decline in confidence amongst such workers for the tenth consecutive month.

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. In December, the index stood at 36.6, after having been at 38.8 in November. Although those months saw worryingly large falls of 2.7 and 2.2 points, January’s score dove 4.8 points to 31.8.

As can be seen from the chart, the current downtrend is quite strong. Although January’s results are the lowest seen since December 2001, they remain above the lowest score seen since the survey has been done in its current form, which was the 27.2 that was registered in October 2001 (actually, September-November 2001 were the only three months in which the index dropped below 30).

The Cabinet Office lays things out starkly in its assessment, simply stating that the prices of many daily products are increasing and income is not, and thus consumers are more reluctant to spend in the current environment. Of course, the report mentions higher fuel and energy costs.

Now the question is whether February’s data will show a drop under the 30 point line. I doubt that anyone in Vegas is putting odds on it, but it would be hard to bet against it, especially as the Outlook Index fell yet again, from 37.0 to 35.8 points. On top of that, wages fell an average of 2.7% in December 2007, for their largest fall in three years.

What could this mean in terms of policy? As Edward Hugh points out at Japan Economy Watch:

In the face of the evidence people are now beginning to adjust their positions. Bank of Japan Governor Toshihiko Fukui said today the cycle of profits feeding into wages and consumption that he had consistently argued had supported what has been on some measures Japan’s longest postwar expansion is now “temporarily weakening”, of course we are about to see how long “temporarily” actually means, since on many measures earnings and consumption have never been strong during the expansion phase, so what they will look like during the contraction one is anyone’s guess.

Hopefully any weakening is indeed temporary. As Edward points out, many measures on earnings and consumption never looked like a strong recovery on paper. We have to start wondering how badly such conditions could hurt profits at Japanese firms in 2008, and how that might affect those firms looking for capital to fund overseas expansion.

Cabinet Office: Economy Watchers Index Down for Eighth Consecutive Month

Each month, the Cabinet Office releases its Economy Watchers Index, a survey measuring sentiment among workers who are particularly sensitive to economic trends. This group includes taxi drivers, hotel staff and restaurant workers. November’s data was released today, and the survey is showing a decline in confidence amongst these workers for the eighth consecutive month.

The actual index score fell by 2.7 points to 38.8 in November. A score below 50 indicates pessimism, while one above 50 indicates optimism regarding current economic conditions. November’s score is the lowest registered since the index hit 38.4 in May 2003.

Although we’re not yet seeing anything resembling the depths of late 2001, when the index slipped into the high 20s, the downward trend looks firmly established and there is worry that higher oil, gasoline and food prices will make things more difficult for this group of workers to feel confident about economic conditions for some time yet. Read more

Cabinet Office: Economy Watchers Index Down for Sixth Consecutive Month

Each month, the Cabinet Office publishes its Economy Watchers Index, which is the result of surveys of workers whose positions are highly sensitive to current economic conditions, such as taxi and truck drivers, sales staff at department stores, restaurant owners, and operators of other retail shops.

The final score for this month’s survey fell 1.2 points, to 42.9. This was the sixth consecutive month that the score was down. A figure below 50 means that pessimists outnumber the optimists in terms of economic conditions. The survey takes into account the opinions of 2,000 workers, who are asked to compare their perception of the economy now against three months ago.

Despite recent statistics showing that retail sales were on the increase in August, the retail subindex fell 2.2 points to 40.4. The largest move down, however, was seen amongst those workers in the dining and drinking industries. That subindex fell 7 points, to land at 36.3, the lowest score in the index. In April, that category stood at 48.8.

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