The output gap, or the difference between demand and supply in the economy, rose for a fifth straight quarter, the government said Monday.
The difference between the economy's actual output and the amount it produces at full capacity climbed 0.7 percent in the three months ended Dec. 31, the Cabinet Office said. The gap rose 0.2 percent in the previous quarter.
The output gap is one of four measures the government uses to determine whether the economy has escaped from deflation, a call it has been reluctant to make. The gap may narrow in coming quarters as growth slows amid the fallout from the worst U.S. housing slump in 26 years.
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