Japan Household Spending: Updated July 7, 2024.

 

Japan's household spending in May down 1.8% on year

Article Source:  https://mainichi.jp/english/articles/20240705/p2g/00m/0bu/007000c

Ideas:

Japan household spending might continue to decrease this summer despite the wage increases in April, as maybe 70 percent of the Japanese workforce, work for small and midsize companies and they probably didn't get a large enough wage increase to feel good about spending in the Japanese economy.

While inflation continues on Japan, wage earners, for all companies only get a wage increase once a year in April while, again, inflation increases seem to be monthly these days.

The Japanese economy, while stagnant lately, is still a very stable economy, as there are usually no real significant shocks except for continued inflation and the weak Japanese yen.

Yes, its still not clear if wages have outpaced inflation, as its hard to see any real consumer spending in the Japanese economy, yet, related to the April wage increases.

Japanese wage earners maybe are still very weary about the state of inflation, and might be waiting for some real significant decreases in inflation before they begin to spend again.

Maybe the summer Obon, or summer vacation period in Japan, there might be some significant consumer spending, but if the summer weather is very hot like last summer that might deter many from going out and spending.

Japanese households might have decreased spending on food and vegetables, as the prices of vegetables has increased significantly during the past year. 

Household spending, or consumer spending, might be half of Japanese GDP, but its not near its potential as inflation constrains consumers spending in the Japanese economy, and for the most part, Japanese are more savers than spenders, and anything, such as inflation might keep them from the normal spending they might do.

But Japan, as with any society is made up of individuals and each person or household has their own wants and desires and they might spend as they see the need to spend on whatever.

The Japanese yen being very weak compared to the Euro or US dollar, might deter Japanese travelers from traveling overseas at this time, while the weak Japanese yen is a positive for foreign tourists traveling to Japan.

And yes, remote work, for the most part, seems to have ended in Japan, but there might be some companies still allowing or encouraging their employees with hybrid work, some in the office and some at home.

Unfortunately, as the pandemic has ended, more and more of the subsidies that the Japanese government gave out are now expiring, and the Japanese government is trying to get back to some kind of normal or new normal after the pandemic.

The Japanese economy has a long way to go to back to any significant economic growth, and there are still many variables blocking normal economic growth.

The Japanese economy might get back to 1 percent economic growth, and if it does, that would be a good start to getting back to normal.

But the problem, recently with the Japanese economy, it gets one or two quarters of positive growth, at maybe 0.5 percent, and then one or two quarters of negative growth, and that seems to be the trend of the Japanese economy these days, as it seems it can never get any real momentum going related to economic growth.

Have a nice day and be safe!