Japan Household Spending: Article: Updated March 9, 2024

 

Japan's Jan. household spending down 6.3% as output halt hits autos

Article Source:  https://mainichi.jp/english/articles/20240308/p2g/00m/0bu/008000c

Ideas:

There are always positives and negatives in a market economy, depending on what side of supply and demand you are on.

Usually household spending is considered a positive if spending is good, but a negative if spending is less than expected.

Such as maybe the warm winter weather might have decreased spending on utilities, while a positive for households but maybe a negative for utility companies.

So maybe comes and goes in a market economy and it will always be that with positives  and negatives depending on the situation.

Not sure how Toyota's situation has really affected household spending but maybe they just put them together, unless there was less buying of small cars.

The Japanese economy should be able to handle a decrease in production and shipments related to the Daihatsu situation and it should not be factor in less household spending.

Yes, the Toyota group is significant in the Japanese economy, but it should not affect all things in the Japanese economy.

Unless I am reading completely wrong, it appears the authors are trying to link the Toyota group situation with less household spending in the Japanese economy.

But there are probably many reasons for less household spending such as inflation and consumer fatigue related to the inflation situation.

Again, there are always positives and negatives related to spending in a market economy, depending on which side of supply or demand you are on.

There is the possibility, using the business cycle example, there are always going to be ups and downs in an economy, and maybe now, Japan is in down period of less household and consumer spending, mostly due to the inflation situation.

Not discounting the Toyota group situation, spending on cars/autos is a major purchase and maybe at this time, households just don't want to commit that much to buying a new, and maybe, they are waiting for the April wage increases to get a new car.

As inflation continues in Japan, households/consumers are looking for bargains and sales and substitute items that are less expensive.

Most likely domestic travel in Japan, among Japanese is less than wanted to expected due to higher airline ticket prices and hotel prices, which have also increased since the pandemic has ended.

Of course the weak yen is a deterrent for Japanese travelers who want to travel overseas, but its an incentive for international travelers who want to travel to Japan.

Japan has got to very careful about education spending, as for example spending in South Korea is out of control, and it might be one reason why South Korea has one of the lowest birthrates in the world, as would-be families don't want children because of the high cost of after school programs to keep up with the Kims in society.

Consumer spending or private consumption is maybe 50 percent of Japan's GDP, but it is much lower than the US or maybe even the EU.

For it to significantly affect GDP growth it needs to get in the 60 percent range but the way the Japanese economy is structured, at the present time, its not going to happen.

For example, more women needs to be in leadership positions with more women having a chance to advance their careers.

A new report just suggested that the workplace for women, is near the bottom of OECD advanced countries which should be an embarrassment for Japan, but probably not as Japan, is still focused on men and not all in the economy.

Have a nice day and be safe!