Japan Household Spending Decreases in Oct. Updated Dec. 16, 2025.

Japan household spending in Oct. falls 3.0%, down for 1st time in 6 monthsc

Article source: https://mainichi.jp/english/articles/20251205/p2g/00m/0bu/012000c

Ideas

Inflation in Japan has been a constant since the pandemic and it doesn't look like its going away anytime soon. Its not a surprise that car sales have decreased and food purchases are sluggish as Japanese consumers cut back and only buy the necessities.

Of course this doesn't look good for the Japanese economy as consumer spending, which its been suggested is 50 percent of Japan's GDP is not going to be enough to help the economy grow.

The spending of two or more people in households is just the average amount as most likely there are many more households above the average and many more below the average. But in reality, besides the 1% in Japan, there might not that many more above the average as Japan, once a somewhat rich country as not kept up with other advanced nations as is most likely well below the average for an advanced country.

For example wages or salaries in Japan are no where near the average level for advanced countries as salaries are way below the average which means salaries haven't really kept up with inflation as disposable income in Japan is not that much these days.

It seems deflation, which has been a major challenge in Japan for a very long time, is still evident with consumers either cutting back and or looking for cheaper products to buy these days.

An economy is very complex with some parts of it always doing very good and some parts of it not doing so good. Inflation or prices have a way of evening things out in an economy with some products and services doing better and then of course some products or services not doing as good as it depends a lot of on the needs and resources available to consumers.

Unfortunately as prices of food continue to increase consumers look for substitutes for what they normally buy with maybe some of the new food they buy being not as healthy as their original choices.

Unfortunately the lower-income and the fixed income groups use a lot more of their income on food purchases as that 30 percent for the average family could be much more in total value or volume for the lower-income and fixed income groups in Japan.

Again, as inflation continues in Japan consumers are cutting back on everything including housing repairs and housing maintenance Japanese households are most likely delaying repairs and trying to delay maintenance on their homes or apartments.

As Japan is an ageing society with its population getting older by the year, medical costs and medical services keep increasing as more senior citizens visit clinics and hospitals, and with the flu season now in full-force more citizens of all ages are visiting clinics and hospitals.

Private consumption or consumer spending might be half of Japan's GDP but that doesn't mean its good enough to help the economy as its much lower than consumer spending in the US or maybe even the EU.

Japanese consumers, for the most part, are more known as savers compared to US consumers who are more known as spenders and less as savers. If consumer spending on the Japan were to increase to 55 or even 50 percent of GDP that might be a significant improvement to help the Japanese economy grow.

But, to be fair, Japan has several disadvantages to improve its consumer spending situation. For one its ageing population is getting older by the year and older populations tend to spend less. And there is the immigration situation, which could potentially help with the consumer spending situation but at the present time Japan doesn't seem to want more immigrants into its country which could significantly help with spending.

Have a nice day!