Gross Domestic Product QoQ

Gross Domestic Product quarter on quarter is the % move in Japan output versus the prior quarter. Gross Domestic Product is the value of final goods and services produced by residents.

The Cabinet Office compiles it through ESRI, meaning Economic and Social Research Institute, from spending, investment and net exports, meaning exports less imports. The headline uses real seasonally adjusted growth, meaning price change removed and seasonal patterns removed, where above 0% means expansion and below 0% means contraction. Releases also cover employee pay, national income and price deflators.

Each quarter brings 2 vintages, called First Preliminary and Second Preliminary, published at 8:50 Japan Standard Time. First estimates arrive about 1 month and 2 weeks after quarter end, 5 business days after the household spending survey. Second estimates follow about 1 month later with corporate investment data, and every release re-runs seasonal adjustment back to the January March 1994 quarter. Markets read seasonally adjusted real change as the headline, with the annualized rate, meaning quarterly pace stretched over 1 year, beside it.

Each release also carries a technical note on revisions.

Moves come from household spending, business investment, housing, government demand and foreign trade, each shown as contribution points to GDP change.

• Private final consumption expenditure: household spending on goods and services, the largest demand item and core of domestic demand.
• Private non-residential investment: business spending on equipment and structures, the main source of revisions.
• Private residential investment: housing investment estimated from construction starts and build schedules.
• Change in private inventories: changes in unsold stocks across materials, work in progress, finished goods and trade.
• Government demand: government consumption of services plus public investment in construction.
• Net exports: exports less imports, where foreign demand inflow adds and rising imports subtract from growth.

The October December 2023 second estimates were published 11 March 2024. Real growth reached 0.1%, or 0.4% annualized, up from minus 0.1% in the first vintage of 15 February 2024. Nominal GDP rose 0.5%, or 2.1% annualized, revised from 0.3% and 1.2%.

Investment drove the revision, rising from minus 0.1% to plus 2.0% in real terms and from 0.7% to 2.9% in nominal terms, adding 0.3 points. Household spending slipped from minus 0.2% to minus 0.3%. Net exports added 0.2 points as exports rose 2.6% and imports rose 1.7%, with imports subtracted in the calculation. The lesson is that the first vintage is not final because corporate data arrive later, so zero growth can mask strong investment and weak spending.

1. Shipment trends: track quarterly shipment trends for each of 90 annual account commodity groups with monthly supply surveys.
2. Quarterly split: divide revised annual shipment values across quarters using the quarterly pattern of helper data.
3. Extrapolation, meaning trend extension: project the newest quarter from period moves in helper data.
4. Domestic supply: add freight margins, meaning transport costs, and net imports, meaning imports less exports, to shipments, then subtract inventory build in stores and materials.
5. Allocation: multiply supply by the latest annual share to assign it to buyers; for example 1000 times 0.6 gives 600. Household spending is then averaged with demand data using accuracy weights.
6. Chain linking: convert each part from nominal, meaning current prices, to real, meaning price change removed, with its price index, then chain the quarterly changes. Real net exports equal real exports less real imports.
7. Seasonal adjustment: remove seasonal patterns with X-12-ARIMA, meaning a statistics method. Fit 1 of 81 models picked by lowest AIC, meaning best fit score, and re-run history each release; nominal and real share 1 model type.
8. Annualized rate: raise 1 plus q over 100 to the 4th power, subtract 1, then multiply by 100, where q is quarterly % change. For example q of 0.1 gives 0.4006, shown as 0.4, and q of minus 0.1 gives minus 0.4.