JP: Household Spending

Thu Aug 27 18:30:00 CDT 2015

Consensus Actual Previous
Year over Year 0.5% -0.2% -2.0%

July household spending disappointed and declined for a sixth month out of seven this year. Spending slipped 0.2 percent on the year after dropping 2.0 percent last time. Analysts expected an increase of 0.5 percent. In 2015, only spending in May bounced up 4.8 percent. Prior to the May reading, spending had declined for 13 consecutive months. Spending in most categories increased with the exception of education. It tumbled 3.9 percent and housing, 5.3 percent.

Spending on clothing & footwear rebounded from a 13.3 percent drop with a 1.2 percent gain. Culture & recreation jumped 5.6 percent after sliding 1.9 percent in June. Transportation & communication expenditures were up 1.8 percent after a 1.1 percent increase last time.

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.