Japan Household Spending:

 Article Source:  https://mainichi.jp/english/articles/20220311/p2g/00m/0bu/019000c

Article:

TOKYO (Kyodo) -- Japan's household spending rose a real 6.9 percent in January from a year earlier, in response to the previous year's steep fall in expenditures due to a coronavirus state of emergency, government data showed Friday.

Average spending by households with two or more people was 287,801 yen ($2,480), the Ministry of Internal Affairs and Communications said.

In January last year, household spending plunged 6.0 percent from the previous year amid a third COVID-19 infection wave. Under the emergency, people were asked to stay at home and restaurants and bars to close earlier.

Ideas:

Consumer spending or household spending is always a major challenge for the Bank of Japan, as spending is never where it should be for the 3rd largest economy.

Consumer spending increased 6.9 percent in January from a year earlier but what does that say when a year earlier it decreased 6.0 percent. 

Again consumer spending is and has been a major challenge for the Bank of Japan as it seems spending is never where it should be or never reaches its potential as Japan has always been more of a savings economy compared to other advanced economies such as the US which is more of a spending economy.

Article;

Even though the country saw another virus resurgence in January this year with the spread of the highly contagious Omicron variant that put over 30 of 47 prefectures under a quasi-state of emergency, restrictions on economic activities were milder.

Reflecting the impact of the infection spike following the year-end and New Year holidays, seasonally adjusted spending in January decreased 1.2 percent from the previous month following a 0.2 percent rise in December.

Ideas:

The idea that there was only a 0.2 percent increase is a good example of an economy that never spends as much as other economies. 

For example, while Japan doesn't celebrate the December holidays like the US does, its still  a major period as you can see the holiday decoration everywhere along with all kinds of event marking the December holiday period.

But only a 0.2 percent increase might have been because of the virus situation was still a major problem a the time.

And its important to remember that most likely the Japanease government asked companies to not have any end of year parties or celebrations because of the covid situation which of course would have decreased spending at hotels and restuarants.

A decrease of 1.2 percent in January might have been again the government not wanting any major end of year or parties and celebrations from whomever and also maybe a lack of travel during the holiday New Year week period.

Article:

The average monthly income of salaried households with at least two people increased a real 1.6 percent in January to 479,805 yen as many people apparently received more overtime pay than last year, when they were working from home, a ministry official said.

The figure climbed for the sixth consecutive month, following a 4.6 percent rise in December.

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

Ideas:

The idea that many people recieved more overtime pay is definetly a good thing as then maybe they might use it in the economy, consumer spending, and not just put into the banks where it really not helping the economy that much.

There has got to be a balance between savings and spending for an economy to be vibrant and healthy.

Too much savings and then there is not enough money moving through the economy at the right velocity. Too much money moving through and economy has the potential for increased inflation is consumer spending begins to get too high.

But Japan, except for the 1980's has not had that problem for a very long time.

Japan's major challenge now is not enough money moving through the economy for the size of the economy. 

As the Japanese economy is the 3rd largest economy in the world, which means potentially there should be more consumer spending than there is now.

Have a nice day and be safe!