We anticipate Japanese companies will try to compete in hiring good workers, driving up wages. Improving employment and rising wages will support demand, prop up economic growth and spur inflation.
The slowdown in recurring profits reflects rising material costs in manufacturing and higher personnel costs in non-manufacturing.
The number is still in line with an overall rising trend.
Domestic demand is clearly the driving force. With strong capital spending plans and signs of rising bonuses, there's a good chance that the economy will grow more than an annualized 2 percent in the fourth quarter.