Japan Household Spending:

 Article Source:  https://mainichi.jp/english/articles/20220906/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Household spending increased a real 3.4 percent in July from a year earlier, helped by the lifting of COVID-19 restrictions that prompted a rise in recreational and dining expenditure, government data showed Tuesday, in a fresh sign of a gradual return to normalcy.

Average spending by households with two or more people stood at 285,313 yen ($2,031), up for the second straight month, but the figure was still lower than pre-pandemic levels, according to the Ministry of Internal Affairs and Communications.

Ideas:

Household spending or consumer spending has maybe been in a pent-up demand phase for a while as many households and or consumers delayed getting out and doing much.

The average level might not reach the pre-pandemic level for a while as there is still a large part of the Japanease economy that is still trying to recover from the pandemic period.

But at the same time, an economy is very complex and as such there are going to be many levels of positives and many levels of negatives for a while as all parts of an economy don't grow exactly in a linear line.

And as inflation continues to be a constant threat to the Japanease economy its going to drage down cosumer spending its not going to be a a peak level for some time.

Article:

Rising prices and a recent resurge in COVID-19 cases cast a pall over the strength of a recovery in private consumption, which accounts for more than half of the country's gross domestic product.

The impact of accelerating inflation is being increasingly felt, with separate data showing average real income dropped 1.3 percent in July from a year earlier. The figure was down for the fourth straight month, with the pace of decline quickening from 0.6 percent in June, in a trend that could dent spending appetite ahead.

Spending on recreation jumped 11.2 percent, helped by a rise in accommodation fees amid a recovery in demand for travel. Outlays on food items fell 1.3 percent, partly because more people dined out when compared with a year earlier when anti-virus curbs were in place.

Ideas:

Private consumption or consumer spending might be half the Japanease GDP but its far below many of the other advanced countries where its around 60 percent or more of GPD.

Some could say its just a cultural situation where Japan, for the most part, is not the free-spending economy like the US.

That would be a logical idea to consider, but if Japan really wants to see some real economic growth, something needs to improve, if possible, like an increase in wages.

But an increase in wages has been debated before in other economies and the idea sounds good but it really didn't increase consumer spending that much.

A combination of wage increases and productivity increases is probably what the Japanese economy needs to see some real economic growth.

Article:

Expenditures on furniture and household items dropped 5.6 percent from a year ago when demand for durables such as televisions was strong ahead of the Tokyo Olympics and Paralympics.

An increase in household spending bodes well for the economy, whose recovery from the COVID-19 fallout has so far been modest. Even though people have begun to spend more on eating out and drinking alcohol, the levels of such expenditures are still lower than before the pandemic in July 2019, the ministry data showed.

Ideas:

The level of consumer spending is probably going to remain below the pre-pandemic or the 2019 level for some time.

Until inflation slows down, until the pandemic is completely gone or people feel 100 percent safe things are not going back to the pre-pandemic level anytime soon.

There is also the possibility that the pandemic has completely changed the way people do things now. Maybe the pre-pandemic days of people doing what they did are not going to be the same now such as less people out and about compared to before.

For example there might be more families and whomever ordering online their food and or dinners instead of going out. There might be more online shopping than before and there might just be more be staying home instead of going out on the weekends.

There could be a complete or parital paradigm shift in how people think or do things compared to what they did in 2019.

Article:

Spending rose from a year ago but we will have to closely watch the impact of rising prices from now," a ministry official said.

The government has taken steps to soften the blow from rising energy and food prices to consumers, with an additional package expected to be unveiled later this week.

Ideas:

Spending might have increased from a year ago but it probably was not that big a deal as consumer spending was probably not so good a year ago, and not its just beginning to get back to some kind of normal or close to it.

The increase in prices is definitely going to have an impact on consumers and each consumer has their own level of elasticity related to prices, meaning some might feel the increase in prices is not a problem and for other even the slightest increase in prices might be a major problem for them.

For example what might have been a normal buying activity such as going to the local conbini and getting a bento for lunch might now be too much for some.

And or for example, stopping by Sogo or some other depato for a take out bento meal to take home might now be too much now.

The Japanease government always says its going to do something but its has to be sure what is does is citizen or consumer user or user friendly and not require too much paper-work and or not just a one-time subsidy handeout to help those in need.

Have a nice day and be safe!