Vaccine boost, surging manufacturing profits

Services spending finally showed signs of life last quarter, underlining that the vaccine boost is finally filtering through. Another reason to be confident about the outlook is that consumer price inflation remains subdued while capital goods prices are rising the most in decades. That means that households’ purchasing power isn’t being eroded by soaring living costs as in many other advanced economies, while the profit margins of Japanese manufacturers have reached record highs despite soaring input costs.