|Year over Year||1.4%||-2.0%||4.8%|
June household spending surprised and dropped 2.0 percent on the year. Analysts expected an increase of 1.4 percent. The decline in spending followed a 4.8 percent bounce in May. Prior to the May reading, spending had declined for 13 consecutive months. Spending on clothing and footwear tumbled 13.3 percent on the year. Expenditures on housing declined 4.1 percent and culture & recreation saw a 1.9 percent drop. Education spending jumped 9.4 percent on the year and transportation & communication expenditures were 1.1 percent higher.
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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