Japan Household Spending:

 Article Source:

 https://mainichi.jp/english/articles/20230310/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's household spending fell 0.3 percent in January from a year earlier, declining for the third consecutive month, as purchases of food and electric appliances decreased due partly to rising prices, government data showed Friday.

Households with two or more people spent an average of 301,646 yen ($2,200), the Ministry of Internal Affairs and Communications said. Compared with December 2022, spending grew 2.7 percent on a seasonally adjusted basis.

Ideas:

Household spending classic supply and demand seems to be in play here as an increase in prices means less spending, for example on food and electric appliances.

The two paragraphs don't seem to match each other, as for example household spending fell 0.03 in January yet "compared with December 2022", grew 2.7 percent.

So whatever it is or whatever is correct household spending or consumer spending is not where it should be for many reasons such as high energy costs related to the home and high inflation, of course related to food.

Article:

The year-on-year drop in spending in the reporting month was smaller than the declines of 1.2 percent in November and 1.3 percent in December, as outlays on recreation and leisure surged 18.6 percent with more people going out during the New Year holidays, a ministry official said.

Food expenditure fell 0.5 percent, including a 16.4 percent plunge in purchases of fresh seafood, affected by rising prices as well as people spending more on eating out, with such outlays climbing 16.2 percent, the official said.

Ideas:

So it seems consumers in Japan are actually spending more due the smaller declines of 1.2 and 1.3 percent. 

An 18.6 percent increase is a good sign that people have maybe moved past the pandemic situation and feel good out and about.

At the same time spending on food, maybe for home use fell 0.5 percent along with the constant increase in inflation of food products. 

There is only so much much that can be used in an economy so consumers maybe are eating out a little more and not buying so much for home use long with the higher food prices at the supermarket.

Article:

"Household spending has been recovering when compared with the previous month," the official said. "The overall trend is that more people are going out, as expenditure also increased in related categories such as domestic package tours and transportation fees."

Purchases of household items fell 9.1 percent, as rising prices dented demand for washing machines and other electrical goods, the official said.

Ideas:

Household spending or consumer spending might be recovering but it long way from being normal and or back to the 2019 level. There are just too many variables now affecting consumer spending such as inflation, low wage growth, and worry about jobs in the future.

Most likely either households bought washing machines during the pandemic and don't need to buy them now as a washing machine is big ticket item and isn't bought every month or even every year.

As the Japanese economy begins to get back to normal and maybe back to the 2019 level all kinds of services will see levels of sales and revenue hopefully similar to 2019 in the future.

Article:

On a nominal basis, spending increased 4.8 percent from a year earlier, up for the 10th straight month, reflecting the impact of inflation.

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

Ideas:

Nominal spending is always interesting but should be seen as how much inflation has increased along with spending. 

It's a good indicator of inflation in an economy but must be taken as it is, inflation with price increases and not real spending.

Consumer spending is a key indicator for the Japanese economy at 50 percent of Japan's GPD but it not as high as consumer spending in other countries such as the US or maybe even the EU.

Have a nice day and be safe!