JP: Household Spending

Mon Dec 25 17:30:00 CST 2017

Consensus Actual Previous
Year over Year 0.5% 1.7% 0.0%
Month over Month 2.1% -2.0%

Household spending in Japan, in real terms, rose 1.7 percent on the year in November after no change in October. Spending, in seasonally adjusted real terms, increased 2.1 percent on the month in November after falling 2.0 percent in October.

The increase in headline year-on-year growth in November largely reflects stronger spending on food. This grew 2.2 percent in real terms on the year in November after no change in October. Spending on fuel, light and water charges also rebounded strongly, up 2.5 percent on the year in November after dropping 2.7 percent in October. This was partly offset by weaker year-on-year growth in spending on housing, down from an increase of 1.8 percent to a decline of 7.9 percent, and transport and communication, down from growth of 3.9 percent to an increase of 0.7 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 stronger year-on-year growth in November, up 2.7 percent on the year after falling by 0.3 percent in October. This measure advanced 2.7 percent on the month seasonally adjusted, after a drop of 1.8 percent in October.

Average monthly income per household was around Y443,000 in November, up 1.8 percent in real terms on the year.

Retail sales data for November are scheduled for release later in the week.

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.