|Year over Year||-1.9%||-3.8%||-1.2%|
|Month over Month||2.5%||0.5%|
Household spending in Japan, in real terms, fell 3.8 percent on the year in February, down from a drop of 1.2 percent in January and weaker than the consensus forecast for a fall of 1.9 percent. Spending, in seasonally adjusted real terms, rose 2.5 percent on the month in February, after an increase of 0.5 percent in January.
The bigger year-on-year fall in real headline household spending in February reflected weakness in most categories of household spending. Spending on fuel, light and water charges fell 4.2 percent on the year after increasing by 1.6 percent in January, while spending on food fell by 5.8 percent after dropping 2.6 percent the previous month. Spending on clothing and footwear, medical care, and transportation and communication also posted large declines on the year, only partly offset by stronger spending on housing.
A measure of core household spending - which excludes housing, motor vehicles and other volatile items and tends to track more closely the consumption component of gross domestic product - also showed weaker growth in January. This measure fell by 3.7 percent on the year in February after an increase of 0.3 percent in January.
Average monthly income per household was around Y484,000 in February, an increase of 0.7 percent year-on-year in real terms.
Household Spending is an important gauge of personal consumption, which accounts for roughly 55 percent of Japan's gross domestic product. It is part of the monthly Family Income and Spending Report.
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.