The world's second-largest economy grew an annualized 1.5 percent in the three months ended Sept. 30 after a 1.6 percent contraction in the previous period, the Cabinet Office said in Tokyo today. The median estimate of 25 economists surveyed by Bloomberg News was for growth to be unchanged from the government's preliminary estimate of 2.6 percent.
The report was revised to account for a finance ministry survey this week that showed spending on factories and equipment fell in the quarter, companies ran down inventories and corporate profits fell for the first time in five years. Housing investment, the biggest drag on third-quarter growth, will hamper the economy until the second half of 2008, the Organization for Economic Cooperation and Development said yesterday.
Today's revised report showed total spending by businesses grew 1.1 percent in the quarter, less than the 1.7 percent reported Nov. 13.
The Bank of Japan's quarterly Tankan business survey next week will probably show a drop in confidence of large manufacturers for the first time this year, economists said. The central bank will hold off raising its key interest rate from 0.5 percent until at least the second quarter of 2008, according to 21 of 30 economists surveyed by a government think tank.
The economy may be stalling, a government report showed yesterday. The leading index, a composite of 12 indicators including housing starts and stock prices, has been signaling a slowdown for three months.
Consumer sentiment is at a three-year low, retail gasoline prices are at a record and the Nikkei 225 Stock Average has slumped 12 percent in the past six months. Housing starts tumbled 35 percent in October, the fourth monthly drop, after new government regulations choked off building permits.
Housing won't recover until April, according to the Building Contractors Society, which represents 69 of Japan's biggest construction companies.