Japan Household Spending:

 Article Source:  https://mainichi.jp/english/articles/20220607/p2g/00m/0bu/025000c

Article:

TOKYO (Kyodo) -- Japan's household spending in April fell a real 1.7 percent from a year earlier, declining for the second straight month, as spending on food items to cook at home sagged with more people going out after the COVID-19 situation eased, the government said Tuesday.

Average spending by households with two or more people stood at 304,510 yen ($2,300), the Ministry of Internal Affairs and Communications said.

Ideas:

Its only natural that after two years of staying at home that people finally began to go out and spend more on eating out and other forms of entertainment.

But to be clear should spending money outside the home also be considered consumer spending. Maybe there is a distinction between what is spend for the home and what is spend for use outside the home.

Also what the first pargraph doesn't say is that inflation had begun to enter into the Japan economy and maybe some conusmers/housholds reduce their spending some because of the higher supermarket prices, the higher energy prices and so on.

Article:

However, seasonally adjusted spending in the reporting period rose 1.0 percent from the previous month as spending on domestic travel increased after a quasi-state of emergency over the coronavirus pandemic was fully lifted in late March

By category, food consumption fell 2.1 percent for the third consecutive month of decline, pulled down by lower demand for vegetables.

Ideas:

As seen, an economy is very complex. Spending can increase in some areas and also decline in some areas. An economy is very dynamic being it is never in a static situation, there are always different economic action, both positive and negative happening at the same time.

So we see domestic travel finally begin to increase, which is very good of course, but spending decreased in other areas such as related to food consumption and demand for vegetables. 

Of course the vegetable situation could be nothing more than a normal supply and demand situation. Perhaps the growing season wasn't very good and as such the supply in the market was less than good so the prices were higher than usual which means demand for the vegetables might have been less.

Article:

Spending on transportation and communication dropped 8.1 percent, down for the first time in seven months, amid sluggish car sales as parts shortages prompted automakers to slash output.

The average monthly income of salaried households with at least two people in April declined a real 3.5 percent to 539,738 yen, the ministry said.

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

Ideas:

Its been suggested that buying a new car in Japan can take up a year on some models because of the parts and chips shortages in the market, so maybe the decline in transportation or a decline in cars that were bought.

At the same time a decline in car sales might be an increase in the use of trains, subways, and buses and so on, you would think that those areas might have seen an increase in activit.

And don't forget the higher gas prices than usual which might have also caused a decrease in in transportation usuage.

The drop in communication is a question markt unless again its about the decrease in mobile fees and the Japanese government has been forcing/suggesting that mobile carriers reduce the fees on the mobile products.

Consumer spending is always a major challenge for the Japanese economy. It might make up half or 50 percent of Japan's GDP but that might not be enough to help the economy and economic growth.

Most advanced economies have consumer spending at 60 percent or more. So Japan has a ways to go to reach the 60 percent level which might help it grow.

But the problem is that wages in Japan haven't risen in over a decade according to some reports. As such consumers are going to be reluctant to spend a lot or spend at the potential that the Japanese economy needs for economic growth.

And now with inflation and energy prices increasing Japanese consumers might feel more contrained to spend even more.

Have a nice day and be safe!