Japan Feb. household spending falls 1.8% on year on weak spending on food
TOKYO (Kyodo) -- Japan's household spending in February fell a real 1.8 percent from a year earlier, marking the third consecutive monthly drop, partly due to consumers cutting spending on food items affected by price rises, government data showed Tuesday.
It marked the longest declining streak since November 2024, when spending dropped for four consecutive months, and came as higher oil prices stemming from the Iran war threaten to further reduce private consumption.
Households of two or more people spent an average of 289,391 yen ($1,812) in the reporting month, the Ministry of Internal Affairs and Communications said.
Spending on food, which accounts for around 30 percent of household expenditures, declined 0.5 percent, dragged down by sluggish seafood and seasoning products purchases, while transportation and communication expenditures fell 5.9 percent, reflecting tepid auto sales.
In contrast, outlays on entertainment rose 10.8 percent, led by growth in overseas package travel, while spending on furniture and home appliances rose 1.9 percent, a ministry official said.
"Given outlays grew on items such as furniture and entertainment, consumers appear to be selective" in what they want to spend on, the official said.
Private consumption has been underpinned by real wages picking up and the pace of inflation such as food price increases slowing, Yuichiro Sato, economist at SMBC Nikko Securities, said.
But "elevated crude oil prices from the Middle East crisis poses the downside risk to consumer spending," he said.
The data is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.
The average monthly income of salaried households with at least two individuals increased 1.6 percent, adjusted for inflation, to 589,038 yen, according to the ministry.
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