“A recession can be painful and frightening, but it is a recurring feature of the economy,” he said. The recovery is effectively over," the Wall Street Journal reported on the 29th.
The Japanese government said, "The Japanese economy is rising, inflation is not remarkably high and not stagflation. The upward pressure on prices is weaker than in Europe and the United States. It is important to overcome deflation through continuous wage increase.”
The WSJ reported shortly after the announcement of negative growth for the second quarter in a row, "The potential for a recession is looming to economists and CEOs as U.S. economic output declines, the Federal Reserve raises interest rates and the stock market tumbles." has shrunk at an annual rate for two consecutive quarters this year, meeting one common definition of a recession.”
The Washington Post, which published its anti-recession argument, said, "The U.S. economy has been wrestling with high inflation for decades on concerns that the U.S. economy could contract for the second quarter in a row at an interest rate of 0.9% a year, leading to a recession, further exacerbating the Biden administration's political challenge." “The new figures from the Bureau of Economic Analysis come at a time of turbulence for the economy, but economists disagree about the possibility of a full-fledged recession. In the past, a six-month contraction usually indicated a recession. Official decisions are made by a panel of experts, and recessions are not typical when unemployment is nearing record lows.”
Regarding the stoichiometry of the US recession, the WSJ wrote in 'The Economic Recovery Is Over' that "the second-quarter decline (minus) in gross domestic product is a bit misleading" and that "stockpiling accounts for all declines, as does the decline in first-quarter GDP" and We prepared two facts: “employment is still increasing”.
Regarding inventories, "the business inventory slump is playing a big role in the ups and downs of the economy," the Commerce Department said on the 28th that inflation-adjusted gross domestic product contracted in the second quarter after a contraction in the first quarter. A significant part of that contraction was as a result of companies slowing down their inventory expansion.”
Regarding the housing market, he said, “The second consecutive quarterly contraction, the definition of a recession, has dampened the housing market as interest rates rise and high inflation has deflated a bubble in business and consumer spending,” he said. Gross domestic product (GDP), a broad measure, fell on inflation and seasonally adjusted in the second quarter to lower annual interest rates to 0.9%, followed by a contraction rate of 1.6% in the first three months of 2022.”
As for the housing market contraction, economists said that "disruptive stoppage in sales growth caused by the pandemic is another sign of a slowdown and adds to the risk of a recession."
"The current economic situation shows signs of continuing to emerge from the corona disaster, and it is not 'stagflation' of economic deterioration amid inflation," Yomiuri reported.
In order to avoid stagflation, he explained that Japan “needs to respond to high prices for the time being and take measures to remove downside risks to the economy” and “promoting intensive private investment, including decarbonization.”
Regarding 'investment', he said, "Stagflation was avoided by increasing private investment related to energy conservation," which was a policy to mitigate the impact of rising oil prices during the second oil crisis of 1978-1980. do,'" he said.
The Japanese government stated in its “White Paper” “We are facing new challenges of rising global prices and outflow of overseas income. The upward pressure on prices is weaker than in Europe and the United States, so it is important to overcome deflation through continuous wage increases.” investment was strengthened.
The Yun Seok-Yeol regime adopted domestic inflation and economic stimulus by expanding investment in the United States by domestic chaebols and increasing military spending.