Japan Household Spending:

 Article Source:

https://mainichi.jp/english/articles/20230407/p2g/00m/0bu/014000c

Article:

TOKYO (Kyodo) -- Japan's household spending in February rose 1.6 percent from a year earlier, marking the first increase in four months, as people spent more on travel amid a recovery from the coronavirus pandemic, government data showed Friday.

Households of two or more people spent an average of 272,214 yen ($2,065), the Ministry of Internal Affairs and Communications said.

Ideas:

Perhaps as spring has arrived and winter is fading people are now out and about and traveling and spending more. 

But at the same time, with inflation still high maybe some consumers are not going to spend but wait and or spend as little as possible.

But then again there are those consumers who are not too concerned about inflation and will continue to travel and spend as normal.

Article:

Expenditures on recreation and leisure, including accommodation, grew 10.8 percent as more people went out and travel demand grew on the back of government subsidies promoting domestic tourism, a ministry official said.

Purchases of clothing and footwear rose 10.4 percent, spurred by increased demand for suits and other formal clothing for graduation and entrance ceremonies at schools in the spring.

Ideas:

After 2 plus years of the pandemic maybe consumers are trying to make-up for lost time out and about. It will be interesting to see what happens during Golden Week and during the summer Obon season whether consumer spending and how much it increase with the increase inflation too.

Again as the pandemic has ended maybe most if not all schools and companies again are going to have formal entrance ceremonies and and graduations.

Of course stores that sell such items of course are again happy for the increase in sales after maybe 2 plus years of less than good sales.

Article:

Spending on utilities such as electricity and gas climbed 13.2 percent as bills for January increased due to low temperatures in the country.

Meanwhile, food outlays fell 0.4 percent, declining for the fifth consecutive month, as people chose to eat out rather than at home, the official said.

Ideas:

While 13.2 percent might seem high and it is but how much of the increase is inflation related and how much is cold temperature related.

And of course as climate change is real factor how much are electricity prices going to increase this summer with the high temperatures.

A decrease of 0.4 percent doesn't seem like that much but with an economy the size of Japan it is a sizable decrease in spending at supermarkets and other places.

Of course how much might be related to increases in food prices at supermarkets too.

Article:

"While it cannot be ruled out that people are spending less on food due to inflation, the declining trend likely reflects more people spending outside," the official said.

On a nominal basis, spending increased 5.6 percent from a year earlier, up for the 11th straight month, reflecting the impact of inflation.

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

Ideas:

No doubt inflation has had an impact on consumer spending at supermarkets and as the same time more people might are tired of just eating at home and want to get out and about and going to restaurants is a good way to spend a Saturday or Sunday or a weeknight.

Inflation is not just an increase in prices but also reflects how much is spent over time. The nominal rate of course is related to price and inflation at the same time.

Private consumer or consumer spending is about 50/60 percent of Japan's GDP while in the US its 60 percent of higher. But we can't compare apples and oranges here as each economy is slightly different as Japan is a more savings style economy while the US is more of a spending economy.

But that the same time, if Japanese consumers maybe were a little more like US consumers maybe the economy would grow more,but of course there are always positives and negatives to each economies situation.

Have a nice day and be safe!