JP: Household Spending

July 28, 2016 06:30 CDT

Consensus Actual Previous
Year over Year -0.3% -2.2% -1.1%

Household spending declined for a fourth consecutive month in June. Spending dropped 2.2 percent on the year and the 5.3 percent drop in March. Medical care was the only subcategory of spending that increased, up 5.6 percent. Fuel, light & water charges plunged 22.2 percent while spending on education tumbled 14.6 percent. Transportation & communication slid 3.8 percent.

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.