Japan's March household spending falls 2.9% on year, down for 4th month
TOKYO (Kyodo) -- Japan's household spending fell a real 2.9 percent in March from the year before, marking the fourth consecutive monthly decline, amid growing concern that higher crude oil prices stemming from the Middle East conflict could reduce private consumption.
Households of two or more people spent an average of 334,701 yen ($2,100), the Ministry of Internal Affairs and Communications said.
Amid the U.S.-Israeli war against Iran, "it remains unclear what impact the situation is having on overall consumption," a ministry official said, adding it will closely monitor how consumers are directing their spending.
By category, spending on food and beverages dropped 2.9 percent, with alcohol consumption, including beer, declining following a surge in demand ahead of price hikes by major manufacturers in April 2025. Outlays for dining were down as there was one fewer Saturday than a year earlier.
While spending on eating out in major cities rose, it fell in smaller cities as well as towns and villages, possibly reflecting a reduction in gasoline use and car travel due to the conflict, the official said.
Transportation and communication expenditures also sank 16.8 percent, reflecting sluggish auto sales, while spending on kerosene and electricity bills declined as higher temperatures in February and March compared with a year earlier led to lower heating costs.
Meanwhile, outlays on consumable goods rose 3.7 percent, climbing for the first time in 10 months, as consumers appeared to have stocked up on garbage bags, plastic wrap and toilet paper amid fears of shortages and higher prices due to the Middle East crisis, the official said.
Spending on overseas package tours dived 30.3 percent, suggesting the conflict may have had an impact, while domestic package tours rose 16.3 percent, indicating some demand may have shifted from overseas to domestic travel, the official added.
The average monthly income of salaried households of at least two individuals increased 4.7 percent, adjusted for inflation, to 557,663 yen, according to the ministry.
In fiscal 2025, the country's household spending rose a real 0.1 percent from the previous year, growing for the first time in three years, led by higher outlays on cars and entertainment.
Households of two or more people spent an average of 313,702 yen per month in the fiscal year through March, while the Engel's coefficient, which represents the proportion of household expenditure spent on food, reached 28.8 percent, the highest level in 45 years, the ministry said.
The spending rise reflected a rebound in car purchases following a decline a year earlier due to a certification scandal, as well as higher spending prompted by the World Expo held in Osaka from April to October. Purchases of personal computers also increased ahead of the expiration of Microsoft operating system support, the official said.
The data is a key indicator of private consumption, which accounts for more than half of the country's gross domestic product.
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