|Year over Year||2.8%||4.8%||-1.3%|
Household expenditures finally increased after dropping for 14 consecutive months. Spending was up a healthy 4.8 percent on the year. All subcategories gained with the exception of culture & recreation which declined 1.9 percent. Three subcategories scored gains in the double digits. Housing soared 23.6 percent while furniture & household utensils jumped 19.3 percent. Transportation & communication gained 14.8 percent.
This is the first positive reading since March last year, the month before the government increased the national sales tax for the first time in almost two decades, which hit consumer spending hard and put a dent in economic growth.
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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