JP: Household Spending

Mon Oct 30 18:30:00 CDT 2017

Consensus Actual Previous Revised
Year over Year 0.4% -0.3% 0.6%
Month over Month 0.4% -0.1% 0.2%

Household spending in Japan, in real terms, fell 0.3 percent on the year in September after increasing by 0.6 percent in August, falling well short of the consensus forecast for an increase of 0.4 percent. Spending, in seasonally adjusted real terms, rose 0.4 percent on the month in September after rising 0.2 percent in August.

The main factor driving down headline growth was weaker spending on transport and communication. This fell by 2.1 percent in real terms on the year in September after an increase of 7.1 percent in August. Spending on fuel, light and water charges also weakened, down 3.1 percent on the year in September after dropping 1.7 percent in August. This was partly offset by stronger year-on-year growth in spending on food, up from 0.6 percent to 0.9 percent, and housing, up from 2.7 percent to 12.2 percent.

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 year-on-year growth in September, down 0.7 percent on the year after an increase of 0.2 percent in August. This measure rose 0.1 percent on the month seasonally adjusted, after a decline of 0.1 percent in August.

Average monthly income per household was around Y437,000 in September, up 2.1 percent in real terms on the year.

Retail sales data released earlier in the week showed year-on-year growth picked up from 1.8 percent in August to 2.2 percent in September.

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.