WASHINGTON, D.C. -- Japan's government reported Monday that the economic giant slipped into recession in the third quarter, making it the largest casualty so far in the global financial crisis. A Gallup Poll conducted in the same quarter found few positive Japanese consumers left after a year of economic uncertainty, with only 9% willing to say economic conditions in their country are good.
Gallup Polls reveal that Japanese consumer confidence eroded this year as global economic troubles deepened and their own economy flirted with recession. Despite a better-than-expected increase in consumer spending in the third quarter, Japanese assessments of the nation's economy grew slightly more dismal than in previous quarters, with nearly 9 in 10 (86%) saying conditions are bad.
Household spending began to skid in March, companies curtailed their spending, and the economy suffered a sharp contraction in the second quarter and further contracted in the third. Economists expect the weak export growth, lackluster consumer spending, and deep cuts in corporate spending to prompt a severe contraction in the fourth quarter.
If the economy continues to shrink, it likely will not shock the majority of Japanese consumers who have perceived worsening conditions since the beginning of the year. As in the second quarter, more than three in four Japanese (78%) in the third quarter said conditions are getting worse.
With many fingers pointing to external markets as a source of Japan's economic woes, many Japanese are likely particularly mindful of economic troubles in United States. Interestingly, Japanese consumers were less pessimistic about their economy than their U.S. counterparts were in March and in June and July, but in September, the gap between them closed when Americans became less pessimistic. (It's important to note that the U.S. survey was conducted in early September before the financial meltdown.)
With the prospect of a long recession and weak global markets, the Japanese government may look to its consumers to bolster its economy. Japan has lowered interest rates and introduced two stimulus packages to lure Japanese consumers into increasing their domestic spending. It may prove difficult to resurrect consumer confidence, however, given how pessimistic that Gallup Polls reveal Japanese have become in the past year.
Results are based on telephone interviews with approximately 1,000 adults in Japan, aged 15 and older, in November 2005 and August 2007 and 750 adults living in Japan, aged 15 and older, in March 2008, June-July 2008, and September 2008. For results based on the total samples of adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points for a sample of 750 and ±3 for a sample of 1,000. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.