|Year over Year||-3.2%||-2.9%||-5.1%|
Household spending declined for an eleventh straight month in February. On the year, spending was down 2.9 percent after sinking 5.1 percent in January. Consumption has been weak since last April when Japan raised its consumption tax by 3 percentage points to 8 percent. Spending in the majority of subcategories declined with only clothing & footwear (up 1.3 percent) and transportation & communication (up 1.0 percent) rising when compared with a year ago. The biggest drops were in furniture & household utensils (down 18.9 percent) and education (down 10.2 percent).
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.
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