Private consumption has been generally picking up, as shown by (1) an increase in consumer spending on such items as beverages and air conditioners due to this year’s extremely hot summer, and (2) a significant increase in car sales in August, reflecting a last-minute increase in demand ahead of the termination of government subsidies for purchasers of environment-friendly cars.
At the same time, housing investment has been leveling out: the number of housing starts increased for two consecutive months, and the contract rate on newly built condominiums in the Tokyo metropolitan area remains above 70 percent. There are signs that employment and income are improving, although the ratio of job offers to applicants remains low and the unemployment rate is relatively high.