JP: Household Spending

Thu Oct 01 18:30:00 CDT 2015

Consensus Actual Previous
Year over Year 1.3% 2.9% -0.2%

Household spending rebounded in August. Overall household spending jumped 2.9 percent in August from a year earlier after a 0.2 percent decline in July and expectations for a 1.3 percent gain. That is the highest level for household spending since 4.8 percent in May, with that being the only other positive reading this year. The data series have been negative for most of the past year-and-a-half.

Household spending has been a weak spot on Japan's economic recovery, and has been sluggish since the increase to the national sales tax in April 2014. While one healthy increase may not be enough to quiet calls for the Bank of Japan to consider expanding its already unprecedented stimulus program in a bid to raise inflation and encourage spending.

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.