JP: Household Spending

Thu Jan 29 17:30:00 CST 2015

Consensus Actual Previous
Year over Year -2.3% -3.4% -2.5%

December household consumption fell 3.4 percent from a year ago, confirming the weakness seen in Thursday's retail sales report. Households have been pulling back for nine consecutive months, ever since the country's national sales tax was lifted from 5 to 8 percent. Analysts expected a decline of 2.3 percent. Seven of eleven subcategories of household expenditures declined from a year ago including food (down 1.9 percent), furniture & household utensils (down 5.5 percent), clothing & footwear (down 1.0 percent), transportation & communication (down 13.8 percent) and culture & recreation (down 6.4 percent). Spending on housing, medical care and education was up on the year.

Household spending is an important gauge of personal consumption, which accounts for roughly 55 percent of Japan's gross domestic product.

The report looks at spending of households and gives a picture of consumer spending. Increases in household spending are favorable for the Japanese economy because high consumer spending generally leads to higher levels of economic growth. Higher spending is also a sign of consumer optimism, as households confident in their future outlook will spend more. The preferred number is the change from the previous year. The data are part of the family income and expenditure survey which is released at the same time as the employment and unemployment data.