According to the Cabinet Office's index of business conditions for July, if the economic expansion continues, it would mark 74 months in July, potentially updating the postwar record. The coincident index's basic assessment remained "improving," but weakness is seen in personal consumption and capital investment. Real GDP for the April-June quarter grew at an annualized rate of 1.1% from the previous quarter, marking the third consecutive quarter of positive growth, while real GNI fell 1.8%, as deteriorating terms of trade due to high oil prices hindered domestic income improvement. Takahide Kiuchi of Nomura Research Institute pointed out that the Japanese economy is in a state of "growth recession," and said that an external shock could end the longest postwar expansion. Keiji Kanda of Daiwa Institute of Research said that the length of the expansion "doesn't mean much," noting that the impact of high prices exceeding wage increases has not made life easier. Both institutes forecast negative GDP for the July-September quarter.
