Japan's real household spending falls 3.1% in August, ninth straight monthly decline
In short
Japan's household spending fell 3.1% year on year in August, according to data published by the Ministry of Internal Affairs and Communications on October 9. It was the ninth consecutive monthly decline; economists had expected a 3.6% drop. Spending fell in nine of 10 categories, including a 12.3% drop in education spending.
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Real household consumption spending in Japan fell 3.1% year on year in August, the ninth consecutive monthly decline, according to survey results published by the Ministry of Internal Affairs and Communications on October 9, as reported by CLS, 36Kr and Jiemian. CLS and 36Kr reported that the decline was smaller than the expected 3.6%; CLS gave the previous reading as -3.6%. 36Kr reported that, after seasonal adjustment, spending rose 0.1% from the previous month. [ 1 , 2 , 3 , 4 , 5 ]
According to the figures carried by CLS, 36Kr and Jiemian, the 3.1% decline refers to average monthly consumption spending by households of two or more people. Nine of the 10 major spending categories fell from a year earlier. Food spending dropped 1.4%, education spending fell 12.3%, and spending on water, electricity, gas and similar items fell 5.2%, a sixth consecutive monthly decline. Spending on clothing, footwear, furniture and household goods also fell. [ 3 , 4 , 5 ]
36Kr, citing Sina Finance, reported that household consumption has declined despite continued wage growth, as persistent inflation erodes purchasing power and consumers remain cautious. It said inflation-adjusted real wages have grown this year but have not lifted consumption, and that in an ageing society more retirees do not benefit from wage increases. The outlet said the weak data poses a challenge for the Bank of Japan's policy communication, but that authorities still plan to continue raising interest rates. [ 2 ]
Why it matters
36Kr, citing Sina Finance, reported that the weak consumption data complicates the Bank of Japan's policy communication, although authorities still plan to keep raising interest rates. The outlet said real wages have grown this year without lifting consumption, as inflation erodes purchasing power and more retirees do not benefit from wage increases.
Key facts
- Japan's household spending fell 3.1% year on year in August. [ 1 , 2 , 3 , 4 , 5 ]
- August marked the ninth consecutive month of year-on-year decline in real household spending. [ 2 , 3 , 4 , 5 ]
- The forecast was a 3.6% decline, and the previous reading was also -3.6%. [ 1 , 2 ]
- Seasonally adjusted, spending rose 0.1% from the previous month. [ 2 ]
- Nine of the 10 major spending categories declined year on year. [ 3 , 4 , 5 ]
- Food spending fell 1.4%, education spending fell 12.3%, and spending on water, electricity, gas and similar items fell 5.2%, its sixth consecutive monthly decline. [ 3 , 4 , 5 ]
- Spending on clothing, footwear, furniture and household goods also fell. [ 3 , 4 , 5 ]
Confirmed by several sources
- Nothing is confirmed by two independent outlets yet.
Still unclear
- Which households the 3.1% figure covers. CLS's first report described it as spending by all households, while later reports by CLS, 36Kr and Jiemian described it as spending by households of two or more people.
- Whether the Bank of Japan will continue raising interest rates. Only 36Kr, citing Sina Finance, reported that authorities still plan further rate increases.
- Japan's household spending fell 3.1% year on year in August. Reported by a single source so far
- It was the ninth consecutive monthly year-on-year decline. Reported by a single source so far
- The expected decline was 3.6%. Reported by a single source so far
- Nine of 10 spending categories fell, with food down 1.4%, education down 12.3% and water, electricity and gas spending down 5.2%. Reported by a single source so far
What local media are saying
Timeline, local time
- CLS reports August household spending fell 3.1%, against an expected 3.6% decline. [ 1 ]
- 36Kr reports a ninth consecutive monthly decline and the 0.1% seasonally adjusted monthly rise. [ 2 ]
- CLS publishes the breakdown by spending category. [ 3 ]
- 36Kr carries the CLS category breakdown. [ 4 ]
- Jiemian publishes the same figures, citing Xinhua. [ 5 ]