JP: Household Spending

Thu Apr 05 18:30:00 CDT 2018

Consensus Actual Previous Revised
Year over Year 0.1% 0.1% 1.9% 2.0%
Month over Month -1.5% 2.7% 2.8%

Household spending in Japan, in real terms, rose 0.1 percent on the year in February, down from an increase of 2.0 percent in January. Spending, in seasonally adjusted real terms, fell 1.5 percent on the month after an increase of 2.8 percent previously.

Officials also published adjusted figures to account for a discontinuity in the collection of sample data. These show spending fell 0.9 percent on the year in February in real terms.

The fall in headline year-on-year growth in February largely reflected renewed weakness in spending on housing. This increased by 10.2 percent on the year in January but fell by 12.3 percent in February. Growth in other major spending categories also softened, with year-on-year growth in spending on food falling from 1.1 percent to 0.5 percent and on utilities falling from 6.8 percent to 6.1 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 - showed weaker year-on-year growth in February, up 0.9 percent on the year after increasing 2.4 percent previously. Average monthly income per household was around Y504,000 in February, down 2.4 percent in real terms on the year.

Retail sales data released last week showed year-on-year growth picked up from 1.5 percent in January to 1.6 percent in February.

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.