Japan Household Spending:

 https://mainichi.jp/english/articles/20210806/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Japan's household spending fell a real 5.1 percent in June from a year earlier, as the previous year's consumption was largely supported by a cash handout program and economic resumption after the initial shock of the coronavirus pandemic, government data showed Friday.

Average spending by households with two or more people in real terms was 260,285 yen ($2,370), marking the first decline in four months, according to the Ministry of Internal Affairs and Communications.

With the aim of easing the economic fallout from the pandemic, the government started the across-the-board 100,000 yen cash handout per person in May last year, boosting purchases of home appliances and other items the following month, a ministry official told reporters.

Ideas:

Perhaps the cash handout last year was enough to motivate consumers to spend of it it, and the first real lockdown or emergency measures had been lifted.

Consumers also can only be held back so much so in June, the end of spring and the beginning of summer, people were ready, willing, and able to get out and about begin to spend again.

It might be a good idea, if possible, to do another major cash handout program this summer as the pandemic has emerged even stronger than before.

Article:

In 2020, household spending plunged 11.1 percent from a year ago in April and 16.2 percent in May, largely affected by the country's first virus emergency from early April through late May, but the margin of the drop was significantly reduced to 1.2 percent in June as social and economic activities gradually resumed.

Under the first virus emergency, people were asked to stay home and non-essential businesses to suspend operations, dealing a heavy blow to the economy.

In the reporting month, seasonally adjusted spending dropped 3.2 percent from the previous month, down for the second straight month, as the government's third virus emergency continued for Tokyo and some other areas through late June. It followed a 2.1 percent decline in May.

Ideas:

It will be interesting to see just what is going to happen this summer as the pandemic is even stronger.

Are consumers going to stay home, are they  going to spend more online, or are they going to ignore the pandemic, as much as possible, and try to do what they want as much as possible.

A two month drop in consumer spending, down 3.2 percent might seem like a lot, and it is a lot if your business is affected by the decrease in consumers spending in some areas such anything related to the services sector.

But as large as the Japanese economy is a 3.2 percent drop is probably not going to hurt GDP too much. Yes maybe some businesses but not the overall economy.

Article:

By category, outlays for furniture and household utensils plummeted 21.7 percent, with the official saying spending for air conditioners and washing machines was sluggish compared to the previous year when the cash handouts are believed to have prompted more people to buy these items.

Expenditures on transportation and communication were down 5.8 percent, as car purchases remarkably shrank from the previous year, when the government's cash handouts are believed to have boosted them.

Spending on commuter passes also dropped since many students and workers bought them in June last year as schools and workplaces reopened after the emergency.

Ideas:

The cash handouts might have been a good incentive to buy some things that families needed at the time and the cash handout came at the right time to buy some household items.

But the car purchases sometimes you just don't know. For example a family doesn't buy a new car every year. So in the previous year they might have used the cash incentive to help them buy a new car, while this year maybe many didn't need to buy.

It will be interesting to see if there is a surge in large screen TV purchases this summer as families might buy one to use to watch the Olympics, just like maybe in the fall of 2019 maybe some families might have bought a large TV, for example from Yodobashi Camera, to watch the 2019 Rugby World Cup that was in Japan.

Article:

Meanwhile, the official noted many people refrained from going to see doctors last year amid the pandemic, which helped this year's June health care outlays increase 2.7 percent.

The average monthly income of salaried households with at least two people fell a record 11.5 percent in real terms to 904,078 yen in June, down for the second month in a row, mainly due to last year's 100,000 yen cash handouts.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

Its quite possible that Japanese companies also decided to reduce bonuses for this year, for example that might usually be given out during the Golden Week period in May.

And whenever workers receive less money, that might mean they might use less in the economy, which means less economic activity taking place.

Consumer spending is always a concern in Japan, and especially by the Bank of Japan, as it is estimated that consumer spending might be as much as 50 percent of GDP.

But an important point to remember. It seems the Japanese economy, ever since the early 90's has been in one crisis mode or another but it just keeps moving forward, as its seems to be a stable economy despite all of the talk of government debt, low consumer spending, and of course now everything related to the pandemic.

Have a nice day and be safe!