Japan's big stimulus package; American Express to cut 5,400 jobs; Underpants and the economy

1 Japan unveils $224bn stimulus (The Guardian) The Japanese cabinet has approved a fresh stimulus package of more than 20 trillion yen (£138bn/$224bn), aiming to lift the economy out of recession and create 600,000 new jobs. Prime minister Shinzo Abe announced the decision at a news conference where he said the new measures were intended to add 2% to Japan’s real economic growth. Abe urged the central bank to move more aggressively to encourage lending and meet a clear inflation target to break out of the economic doldrums that have plagued Japan for two decades.

Abe, who also served as prime minister in 2006-07, has vowed to make reviving the economy his top priority, promising support both to small businesses and big industries such as the auto sector. The spending package includes 10.3tn yen in extra outlays by the central government. Abe's administration is pledging to spend 19tn yen in 2015 in support for reconstruction of the coastal areas devastated by the March 2011 disasters.

It also includes a request to raise military spending by 100bn yen from the 4.6tn yen budget last year, the first such increase in a decade. The increase is partly aimed at beefing up monitoring and defences around islands in the East China Sea, known as the Senkakus in Japan and the Diaoyu islands in China. A territorial dispute over the uninhabited islands flared into anti-Japanese riots across China last autumn after Japan's central government purchased them from a private owner.

2 American Express to cut 5,400 jobs (BBC) American Express has announced plans to cut 5,400 jobs worldwide from its total workforce of 63,500 by the end of 2013. The credit card provider said it took almost $600m in after-tax charges in the fourth quarter of 2012. The company said that these charges would halve its net profit for the quarter from $1.2bn to $637m.

It said the majority of the job losses would be in its travel business, which is being "fundamentally reinvented as a result of the digital revolution". American Express said it was having to adapt parts of the business as more customers make payments online or via mobile. It added that the job losses would be spread proportionally between the US and international markets.

"Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth," said chief executive Kenneth Chenault. "For the next two years, our aim is to hold annual operating expense increases to less than 3%. The overall restructuring programme will put us in a better position as we seek to deliver strong results for shareholders and to maintain marketing and promotion investments at about 9% of revenues," he said.

3 Underpants and the economy (Kevin Core on BBC) The most powerful economist in the US once said the health of an economy was reflected in men's underpants sales. Alan Greenspan, now the former chairman of the Federal Reserve, believed they were an indicator of disposable income. Journalist Robert Krulwich, who originally learned of Mr Greenspan's theory 20 years ago, told BBC Radio 4 that the idea was still attracting interest from economists.

But the fashion for low slung jeans may have changed men's buying habits. Mr Krulwich said he was talking to Mr Greenspan in the economist's office when he began to describe the predictive power of men's underwear when it came to the economy. "He mentioned that the sales of men's underwear are predictive of what's about to happen in the economy," the journalist said. He then made the discovery that at a point when the underpants begin to sell a little bit less that tells you that the male of the household is likely to be protecting spending. 

Mr Krulwich said Mr Greenspan was using a 1970s model in which the man would often give money to other members of the family - maintaining spending on his partner's and his children's clothes, but not his own. "Since then, men's underwear has gone through a kind of fashion change," he said. "In the hip hop era people would wear their pants low exhibiting their six pack and the brand of underwear they were wearing, so Calvin Klein was a name you let other people see - at which point all bets were off."