JP: Household Spending

Thu May 28 18:30:00 CDT 2015

Consensus Actual Previous
Year over Year 3.0% -1.3% -10.6%

April household spending was down 1.3 percent from a year ago. This was the thirteenth consecutive month of decline. The retreat in spending began when the sales tax was increased from 5 percent to 8 percent in April 2014. Consumers went on a spending frenzy prior to the enactment of the increase and shut off the spending spigot when it was introduced. The weak consumption figures could threaten to keep inflation subdued in the months ahead, though recent commentary from the BoJ suggests the bank is optimistic about the economy's resilience.

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.