However, private consumption has recently been resilient due to the improvement in the employment and income situation as well as the wealth effect resulting from the rise in stock prices. Private consumption is expected to gradually become firmer on the back of continued improvement in the employment and income situation.
Turning to the outlook for Japan’s economy, some argue that the tightening of labor market conditions limits the room for growth. Personally, I do not agree with this view. Firms have been addressing immediate labor shortages by, for example, closing unprofitable stores, shortening business hours, and limiting orders for their services.