Japan Raises GDP Estimate

Japan today raised its estimate of third-quarter economic growth as consumers in the world’s second-largest economy spent more than initially reported.

Gross domestic product rose 0.8% last quarter, seasonally adjusted, from the second quarter. That compares with an initial estimate of 0.7% growth. Growth in the second quarter was revised to a gain of 0.9% from an initial estimate of 1% growth, the government’s Cabinet Office said.

Growth in consumer spending, which accounts for more than half of the economy, was revised to a gain of 1% from a 0.8% increase.

Japan already may be heading toward its fourth recession in a decade as companies cut jobs and wages in response to sagging exports. That’s likely to shake consumer confidence.

“It’s not possible to hope for a sustained recovery in consumer spending anytime soon,” said Minako Iida, an economist at Deutsche Securities Ltd.

“It’s likely that the economy will return to recession, possibly in this or the next quarter,” he said.

Japan’s economy grew at an annual pace of 3.2% in the July-September quarter, faster than the initial estimate of 3% growth, the GDP report showed.

Exports grew 0.6% in the third quarter, more than the earlier estimate of a 0.5% gain and less than the second quarter’s 5.9% expansion.

Companies such as Sanyo Electric Co., the world’s biggest maker of mobile-phone batteries, are cutting jobs and wages, pushing the unemployment rate up to 5.55% in October, matching last December’s record.