There are tentative signs in recent data of an increase in spending that we suspect is linked to April's consumption tax hike. In particular, construction orders have soared as homebuilders seek to avoid the higher sales tax. Meanwhile, business surveys reached fresh highs in October and households are upbeat too, despite falling real incomes. Consumer spending has rebounded, helped by strong employment gains. Nonetheless, with export volumes weakening, GDP growth probably slowed last quarter after the surge in the first half of the year.
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