Japan Households Spending: Updated September 9, 2024.

 

Japan household spending in July edges up 0.1% amid wage increases

 Article Source: https://mainichi.jp/english/articles/20240906/p2g/00m/0bu/005000c

Ideas:

Possibly the wage increases are just beginning to have an affect on Japan household spending, but to be fair, there is not a super surge in spending as maybe inflation is sill part of the picture in the Japanese economy.

Yes, again, the inflation situation is having a real affect on the Japanese economy, as consumer spending in Japan, is maybe 50 percent of GDP, but it can't be seen because of the inflation situation and the weak Japanese yen, which increases import prices too much.

Even at 0.1 percent that is with the margin of error, so it  quite possible there wasn't much of an increase related to Japanese household spending.

Average spending is just an average and really doesn't give a good spread or variance to see what was the highest amount and the lowest amount. 

Most likely unfortunately, the lower income groups might have spend much less and they have less income to use for everything.

An economy is not just made up of the middle class or even upper middle class, but the lower classes too, and unfortunately, the lower class income group is getting larger in Japan each year.

Housing outlays usually are not an everyday thing so some months might be more than other months depending on the mood of the households.

Of course TV's would be bought to watch the Paris Olympics, just like during the Rugby World Cup or the World Cup, when Japan is involved, new TV's are bought, even though they might not need a new one.

Package tours surged which indicates, the pandemic has finally been put to rest and people are moving around Japan and even going on overseas trips despite the weak yen, which decreases the purchasing power of Japanese travelers in overseas markets.

Perhaps the wage increases in April are finally being felt by Japanese households and they are seeing the affects and finally beginning to spend some again, despite the inflation situation and the weak yen situation.

Of course, as inflation continues Japanese households have been cutting back on food that is expensive for them. Most likely some food is elastic meaning as the prices rise too much, consumers decide they don't want to buy it and of course choose chicken instead of beef and pork.

And as the Japanese government reduced or eliminated the energy subsidies, Japanese households cut back, when they can, to reduce expenses.

It might be worse for the lower-income groups, as they spend more on food for the amount of money they have, which means they are looking for substitutes as they can't afford the normal prices on food.

Its natural that consumers are becoming more selective as inflation continues in Japan, and yes, consumer spending might be recovering, but its never been that strong in Japan compared to the EU or the US.

Perhaps, due to inflation Japanese households are still holding back on spending, and, again, are being very selective and not just going out and spending all of their wage increase.

Household spending or consumer spending,, again, has never been that strong in Japan, and with the pandemic and now inflation, and the weak Japanese yen, Japanese consumers just not spending like US consumers do.

Have a nice day!