JP: Household Spending

May 29, 2017 06:30 CDT

Consensus Actual Previous
Year over Year -0.7% -1.4% -1.3%
Month over Month 0.5%

Household spending in Japan, in real terms, contracted 1.4 percent on the year in April, little changed from the 1.3 percent decline in March, but weaker than the consensus forecast for a fall of 0.7 percent. Spending, in seasonally adjusted real terms, rose 0.5 percent on the month in April after dropping 2.0 percent in March.

Spending on housing recorded the biggest increase on the year in April, up 12.1 percent in real terms. Spending on fuel, light and water charges rose 0.8 percent on the year in April after contracting by 2.0 percent in March, while spending on food fell by 0.7 percent after a drop of 1.3 percent the previous month.

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 - showed a smaller year-on-year decline of 1.3 percent in April, compared with a 1.9 percent fall in March.

Average monthly income per household was around Y472,000 in April, down 2.2 percent on the 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.