Japan Consumer Spending:

 Article Source: https://mainichi.jp/english/articles/20221108/p2g/00m/0bu/003000c

Article:

TOKYO (Kyodo) -- Japan's household spending in September increased a real 2.3 percent from a year earlier, rising for the fourth month in a row, as people spent more money on tourism following the removal of coronavirus restrictions, the government said Tuesday.

Households of two or more people spent an average of 280,999 yen ($1,900), the Ministry of Internal Affairs and Communications said. On a seasonally adjusted basis, spending rose a real 1.8 percent from August.

At the same time, real wages fell 1.3 percent from a year earlier in September, marking the sixth consecutive month they dropped, separate data from the labor ministry show.

Ideas:

It's good that consumer spending in Japan is beginning to improve. As conditions improve there will probably more and more spent on tourism in the future. 

But the real challenge is of course and has been real wages. Companies maybe are too stressed out related to their profit margins to help their employees makeup the difference related to inflation.

But the question will continue to compound itself, something like a synergy effect. As real wages decrease, and inflation increases there is the potential for less and less spending overall in the economy, unless companies can find ways to help their employees.

Article:

The sluggish wages indicate consumer sentiment could cool in the coming months. The possible bleak outlook for consumption, which accounts for more than half of Japan's gross domestic product, bodes ill for Prime Minister Fumio Kishida's efforts to prop up the world's third economy in the face of accelerating inflation.

By category, spending on recreation jumped 12.6 percent for the sixth straight monthly gain, led by an increase in bookings at hotels and other accommodation and package tours.

Expenditure on transportation and communication, including spending on auto-related parts and train fares, expanded 8.8 percent.

Ideas:

Sluggish wages will continue to be a major challenge for the Japanese economy unless companies do something. But then again maybe they can't or are unwilling to increase wages.

Part of the problem, these days, is maybe too much emphasis on shareholders and not enough emphasis on company employees like in the past. Japanese companies maybe have become like their western counterparts and only think of shareholder value and not the value of the real stakeholders in the company, meaning the worker.

But it's good that domestic tourism is finally picking up again and hopefully will continue to increase. 

At the same time more and more international tourists can only help the situation too. 

Article:

Spending on food climbed 1.2 percent, as more people dined out and consumers rushed to buy alcohol products before price hikes by major manufacturers from October, a government official said.

Conversely, outlays on utilities such as power and water fell 1.6 percent, led by a 13.1 percent drop in spending on gas, as more people spent time outdoors than they had the previous year, according to the official.

Japan's core consumer prices leaped 3.0 percent in September, marking the sharpest gain in over 31 years. The Kishida government compiled a 29.1 trillion yen economic package late last month to help mitigate the impact of rising prices such as utility bills and encourage wage growth.

Ideas:

An increase of 1.2 percent only might be because of higher food prices and at the same time too more people eating out too. 

Again just like in 2019, before the tax hike, people went on spending sprees before the Oct. 2019 sales tax increases.

Also as energy, electricity, gas prices increase consumers might be conserving energy usage as prices continue to increase.

Japan's consumer prices, while high for Japan, are still somewhat lower compared to what is/was happening in the US.

But maybe Prime Minister Kishida and is cabinet are a little slow in getting some kind of relief package for those in need.

Article: 

The stimulus package comes as Kishida has repeatedly called on companies to raise pay for the major salary negotiations season in spring next year.

The Organization for Economic Cooperation and Development in

September cut its forecast for Japan's growth for 2023 to 1.4 percent from the previous outlook of 1.8 percent.

Ideas:

Prime Minister Kishida can ask companies to increase wages but if they have no room in their profit margins there is not much he can do about it.

Again, at the same time, companies might not think employees are a priority compared to other stakeholders such as shareholders who companies want to keep happy compared to keeping employees happy. 

Even at 1.4 percent that would be decent growth for the 3rd largest economy in the world. 

Japan rarely goes more than 2 percent and most quarters or years rarely gets above 1 percent GDP growth.

Have a nice day and be safe!