Japan's Real Wages: Updated Nov. 11, 2024.

Japan real wages in Sept. fall 0.1% on year, down 2nd month in row

Article Source: https://mainichi.jp/english/articles/20241107/p2g/00m/0bu/007000c

Ideas:

Wage increase in Japan usually only take place in April at the beginning of the new fiscal year, while inflation and prices increases happen anytime so no doubt real wages might have fallen behind prices in Japan.

Subsidies, are good and needed to help Japanese households, but they should only be temporary, at best in a market economy, but at the same time, inflation in Japan is not temporary and seems to be constant since the pandemic.

Wage increases should have been every year, and at a level that Japanese workers could feel good about the wage increases and then spent freely as needed.

Real Wages are what are important as real wages are wages without inflation and is what a consumer can use to buy things in the market place.

Again subsidies are good, but when they end Japanese consumers are back where they started as subsidies are only temporary and don't really solved the main problem of constant price increases.

The real challenge is the weak Japanese yen, which increases import prices in Japan, as Japan is a resource-poor country which put the Japanese domestic economy under a lot of stress.

But the real problem is the weak Japanese yen is good for Japanese foreign investments, Japanese exporters, and foreign tourists who go to Japan, as they have more purchasing power to buy things.

Average wages in Japan is for the average workers, most likely at a large company, while wages for 70 percent of the working population in Japan don't work for the large companies as they work for small and midsize companies who pay considerably less than the large Japanese companies.

And then there is the large group of contract workers in Japan along with the part-time workers who make even less and they are a large group of workers in Japan.

And at the same time many women, working women, especially working women with children might work for service type companies that have thin profit margins and make even less, which put as strain on Japanese families.

Prices increases of 2.9 percent don't seem like much, but you add that amount up each month it can be a large price increase for any Japanese household, especially the lower-income households in Japan.

This past summer, again was record temperatures in Japan, and of course Japanese households, especially in August during the month long holiday period people might have run their air conditioners a lot to escape the heat.

And or they might have tried to escape the heat and refrained from running their AC's too much and went the malls, if there were any, and stayed there during the day.

Most likely, Japanese companies might have used the summer bonuses on wage increases and companies just didn't have enough left to pay the usual summer bonuses.

In Japan, the salaries/wages are much lower than the US so companies makeup for it by giving workers two bonuses, one in the winter and one in the summer.

Real Wages are always adjusted for inflation and as inflation has been a constant in Japan since the pandemic real wages are been less for a very long time.

Have a nice day!

Japan Real Wages: Updated September 9, 2024.

 

Japan's real wages rise 0.4% in July, up for 2nd month on bonuses

Article Source:   https://mainichi.jp/english/articles/20240905/p2g/00m/0bu/017000c

Ideas:
Real wages are important as nominal wages include inflation, but at 0.4 percent that's not much of an increase.

If 1,000 Japanese were surveyed, they might say their wages haven't grown that much even though some might have gotten a wage increase.

It must be remembered, that maybe 70 percent of Japanese workers don't work for the large name-brand companies but small and midsize companies, and most likely, they didn't get the 5+ percent increase that large company workers got in April.

But something it better than nothing for wage increases, but at the same time, does the wage increase cover the inflation that continues in Japan.

Bonuses are traditionally a part of Japanese company culture, and most Japanese workers can probably expect some kind of bonus in the summer and and in December.

Of course not all companies pay the same bonus as of course the large companies pay the most while small and midsize companies of course pay much less.

Overtime might be down, as the Japanese government is trying to get companies to limit overtime as a way to improve the work life balance of Japanese workers.

Most likely, in years past, companies didn't give a lot of bonuses as the Japanese economy just wasn't that strong and was/is stagnant, and so companies seeing the economic environment as not that good decide not to give bonuses or they reduced the amount of bonuses in previous years.

Yes, as wage increases take affect they might begin to level off as the summer wears on with high summer temperatures, and the typhoon season having an affect on the Japanese economy.

Even though it was the so-called Bon season, or summer holiday season in Japan, there might not be that much activity due, again, the high summer heat and the typhoon season having some kind of affect on the Japanese economy.

Again, it must be remembered that not all Japanese workers work for the large name-brand companies, as it been reported that up to 70 percent of Japanese workers work for small and midsize companies, which means they might not have gotten the 5+ percent wage increase that the large company workers got.

And then there are the contract workers and part-time workers, which make up a significant number of workers in Japan, as like globally, more and more economies are using contract and part-time workers only to reduce costs, and they didn't get the same wage increase.

Not all workers in Japan get the 529,266 nominal wages, as many Japanese worker don't even get near that amount. 

That might be a reason why only 6% of Japanese workers are engaged or enthusiastic about their work in Japan, as they are either unhappy or just going though the motions at their company.

But its a global situation, and has been for sometime as workers globally, are just tired of their work and want to change but can't see or find something they really want to do, so they just go through the motions at their workplace and hope for 5 or 6 to come quickly so they can go home.

Have a nice day! 

Japan Real Wage Increase: Updated August 9, 2024

 

Japan real wages log 1st rise in 27 months on higher summer bonus

Article Source:  https://mainichi.jp/english/articles/20240806/p2g/00m/0bu/017000c

Ideas:

Maybe, just maybe, its the beginning of the end, but a long end, to inflation in Japan and real wages finally outpacing inflation.

But its been many months of inflation more than than wage growth, its going to take time for Japanese households or families to feel the real affects of wage increases that outpace inflation.

However there might be some real hope as many have said the increase in wage affects wouldn't be seen until the summer period, which is now.

Actually wage declines started in the early 2000's with the Toyota Group refusing increase wages, and then all other big companies followed and its been very slow wage increases ever since that time.

Data watchers or trend followers, in the 21st century, can't rely on past dates for anything as companies makes moves and changes as they now see fit and of course everything revolves around the shareholder and not the company worker, like decades ago.

Some companies, maybe many companies, which are shareholder companies are very concerned about how much in bonuses they give to company workers and maybe some or many shareholders are always concerned about their shareholder earnings, and if companies give too much in bonuses it might affect the quarterly earnings.

The Bank of Japan is not going to rely only on the upbeat figures, as they are going to see if the Japanese economy has really grown, and if inflation is finally trending down.

While wage increases might be helping if the Japanese economy is still somewhat stagnant they might wait until the fall season to increase the key rate.

But yes, the weak Japanese yen is a major problem for some in the Japanese economy, and especially Japanese importers.

The real challenge or question is, if inflation is actually trending down and wages are trending up, what are Japanese consumers going to do, and consumer spending in the Japanese economy has been stagnant for a very long time.

While the current data seems to be positive, again, its not enough, as the real clue will be Japanese consumer spending in the economy or Japanese consumer sentiment, meaning, do Japanese consumers finally feel good enough to spend again in the Japanese economy,

Again, it might take until the fall to really see what Japanese consumer think and feel, but there is the summer heat wave in Japan which might deter Japanese consumers from going out and spending, but there is always online shopping which might increase during the summer months as more consumers will stay home and just shop online to maybe stay out of the heat, if they can afford to run their AC's.

But again, everything is up in the air, as again, the real test is consumer spending and wages increases as are they enough to help consumers get back to spending, or does their need to be one or two more wage increases for consumer to feel good and or inflation to really begin to trend down.

Its very good that companies finally gave wage increases, but its even better that finally part-time workers saw a significant wage increases. But lets be fair, part-time workers are always at the bottom of the worker ladder and they never get the best wages or benefits in the company ladder.

Many service companies and many small companies have very thin profit margins, which almost make it very hard for them to increase part-time wages as many service type companies rely on part-time workers only and they can't afford to have many full-time workers on their staff.

Its  quite possible, many Japanese households might be waiting for the Obon season to spend again, and they are just coming off the Golden Week period in early May, which usually is a big spending week in Japan.

There is also the possibility of consumer weariness in Japan as inflation and continued high prices as caused consumer sentiment, to weaken to the point of less and less Japanese consumers are spending now. 

And there is the continued summer heat as its been suggested that when the temperature in Japan gets above 35 C, Japanese consumers might actually spend less and not more, as summer spending is usually good, but not recently in Japan.

There is always going to be a lag in spending, as Japanese households maybe have to decide how much to save, how much to spend on their bills, and finally how much extra income do they have left to spend in the economy.

Japanese households, like everywhere, have limited budgets and they might decide to spend on this and not on this such as home expenses and or home repairs, as again, there is only so much income to go around.

Natural disasters, in Japan, is always a concern, as earthquakes and typhoons are a major challenge, always in Japan, like in 2019 when the Tokyo area was  hit with some major typhoons in a short period of time.

Japanese households, again like everywhere, will cut back when they can, and cutting back on utilities after the subsidies end is normal for consumers.

Durable goods, such as air conditioning units might be up in Japan, but the hot summer months are going to increase AC costs usage even higher and or some or many, if they can, are going to head to the underground train station malls and other places to reduce their AC usage this summer.

So there seems to be no end in sight, at least this summer as the hot summer months, which can easily be extended in September, and even October, as the heat just keeps on in Japan, and Japanese households have to figure out how to lower costs and at the same time stay cool in their homes.

Have a good day and be safe!

Japan Real Wages: Updated July 9, 2024.

 

Japan real wages down 1.4% in May, 26th monthly fall despite hikes

Article Source:  https://mainichi.jp/english/articles/20240708/p2g/00m/0bu/014000c

Ideas:

Japan's real wages are just wages against inflation, which it looks like wages are decreasing since inflation causes less purchasing power related to any extra income Japanese households have.

While wage growth is good, the challenge is wage increases only happy in April, for the most part, while inflation could be every month, which makes the wage increase difficult to keep up with inflation.

It could easily be thought that some price increase are not relevant to me, as I don't buy any of the products that have increased, but in a large economy like Japan, there have been increases in many different products and prices increases eventually will begin to affect everyone.

The average wage increase might have been 5.1 percent, but it must be remembered that most likely that was large Japanese company wage increases and not small and midsize companies, which might have given much smaller wage increases.

For example maybe some 70 percent of Japanese wage earners don't work for large name brand Japanese companies, which means up to 70 percent of Japanese wage earners are still feeling inflation more than the large company workers.

But that might be what a market economy is all about, the large companies have more resources, and the small and midsize companies have to make do with what they have.

A ripple affect might have begun, but will it become a positive factor in all of the Japanese economy.

But again, as the wage increases were not the same for all Japanese companies will wage earners working for the small and midsize companies begin to spend like the wage earners in the large companies, or will the Japanese economy remain an economy of haves and have nots.

It might be too early to tell, as even the May to July period might not see a lot of spending as wage earners/Japanese households might be waiting to see if inflation is really going to decrease in the coming months.

Until there is significant decreases in inflation, consumer spending in the Japanese economy might not be that much at this time, even though there were some good wage increases.

High utility and food costs are costs that might cut into a Japanese households discretionary income and most likely households might not reduce or cut their utility usage, most likely they might cut back on the type of food they buy especially higher priced fruit and vegetables.

And now, as hot weather has again returned to Japan, most households are probably going to run their air-conditioners a lot, and or, as needed, go to any mall type places where they can spend the day, especially on the weekends.

Again, wage increases were good and needed, but it still might not be enough to get Japanese households spending in the Japanese economy, just yet.

The Bank of Japan can use all the slogans they want but the real variance is what do Japanese households or Japanese consumers feel with the wage increases. Are they enough to get them out spending again.

The Bank of Japan and the US Federal Reserve have used different strategies to reduce inflation and get their respective economies moving again.

The US strategy seemed to work, for the most part, while the Bank of Japan's strategy might have been to just let inflation run its course and not do anything that might cause any real side-affects to the Japanese economy, or something like, "do no harm" to the Japanese economy with our strategies.

As in any market economy, there is a big difference between full-time wage earners and part-time wage earners, but the difference might be too much in Japan, as there are a lot of part-time wage earners, maybe more than other advanced economies. 

Many or most of the part-time wage earners in Japan might be woman and or women with children, who might need to work part-time and still take care of their children,

The challenge or problem is maybe many of these women might want to work full-time jobs but the Japanese work environment might not be good for them as women with children and full-time career track jobs are not easy to find or companies willing to accommodate women with children.

It seems the trend, globally, is not a reduction of work hours, but work hours might be trending upward due to complexities in work and work stress in today's global work world.

The construction industry might have needed to increase wages due to the labor shortage and to get good reliable workers they need to pay good salaries, as maybe young Japanese workers don't want to work in the construction industry these days.

While compound services might be related to transformations related to work and demand for their services, and as such they might not need as many workers.

Have a nice day and be safe!

Japan's Real Wages: Updated June 13, 2024.

 

Japan's real wages fall for record 25th straight month in April

Article Source:  https://mainichi.jp/english/articles/20240605/p2g/00m/0bu/006000c

Ideas:

The cumulative effect of decreasing real wages, month after month, has got to be a major stress on many Japanese households.

Its been 25 months of declines, which means consumer spending or household spending in the Japanese economy is not going to improve much.

Companies might have increased wages, but inflation is still higher than what the wage were which again, means possibly not much spending in the Japanese economy.

Japanese households or Japanese consumers, eventually, if not already, are going to say enough is enough and begin to only buy the basics needed for their households.

Yes, the Bank of Japan could have should have increased the key rate a long time ago, but the BOJ kept saying there are just too many side affects to increasing the rate in Japan at this time. 

But, to be fair, what about the side affects for Japanese households and higher prices? Yes, if the key rate was increased many businesses might have had to pay higher business loan payments. 

And those already with existing loans would have had to pay even more interest, and there is the the possibility of housing payments and so on.

No one really pays attention to nominal wages as real wages are the key for Japanese households as nominal wages includes inflation and other factors.

So nominal wages increased for the 28th consecutive month, meaning inflation has increased for 28 months in Japan.

Not to keep talking about it, but this all started back in the early 2000's with the Toyota group deciding there would be no wage increases and then all other companies decide to do what the Toyota group did and ever since, then up to April of 2023, there were minimal wage increases in Japan.

Its understandable, back then as the Toyota group felt wages grown too much in Japan and many companies were worried about remaining competitive with Chinese companies which had lower wages.

But not the situation is much improved as wages in China have reached a level comparable to Japanese companies, or near comparable, but not completely.

It's understandable that large major Japanese companies can afford to pay higher wages, and its understandable that small and mid-size companies, just don't have the needed resources to pay the same wage increases as the large companies.

Because their is a labor shortage in Japan, at this time, many or some small Japanese companies might begin to lose employees to larger companies that pay higher wages, and if possible, it understandable for a Japanese household to want to move to a large company for better pay.

One of the challenges for small and mid-size companies is being able to pass-on their wage increases to the next in the supply chain, which might include large companies, but unfortunately, large companies might not like the idea that small companies are increasing their prices for wage increases.

For example large companies offered age increases of 5 percent or more and smaller companies could only offer wage increases of 3.62 percent. That doesn't sound like it that much of a difference, but over one year, with inflation it adds up overtime. 

The government subsidy program was a good idea, but the government can't do everything as even the government supposedly only has so much money in its budget.

Most likely inflation will remain high through the summer, and with the summer heat approaching energy and AC bills are going to be very high in Japan again this summer.

Probably mining and quarrying sectors are somewhat seasonal sectors and not operational every month of the year. As far as the construction sector goes, the companies in that sector maybe felt they had no choice but to increase wages, as if they didn't they might begin to either lose workers or not get new workers.

Even though wages might have increased, inflation most likely was much higher for many Japanese households even for those in the construction sector.

Just what is the percentage of full-time workers in Japan compared to part-time workers? Unfortunately, the number of part-time workers might have increased as many companies, not all but some, or many, are now mostly using par-time workers to reduce costs and improve the bottom line.

The service sector seems to be where many of the part-time workers are at, as many service type companies, to reduce costs, just use part-time workers these days. 

An economy can't exist only on part-time workers, but to be fair, maybe the companies feel they have no choice as they have to maintain their profits margins, and too many full-time workers would cut into their profit margins.

Service sector companies usually have very thin profit margins can't afford to hire too many full-time workers.

Have a nice day and be safe!

Japan's Real Wages: Ideas Later: Updated May 2, 2024.

 

Japan's real wages down for 2nd straight year in FY 2023

Article Source:  https://mainichi.jp/english/articles/20240523/p2g/00m/0bu/023000c

Ideas:

Maybe its not doable but companies should increase wages on a monthly basis and not just in April, the beginning of the new year. Of course Japanese companies are not directly responsible for inflation except for the increase in prices in Japan by most companies. And of course most Japanese companies can't afford to increase wages every time inflation increases or companies would go bankrupt. 

The real challenges seems to be the Japanese yen and imports as imports prices remain high and import companies have to pass-on their costs to the next in the supply chain, which might be the final customer eventually.

And then there is the variance between the US key rate and the Japanese key rate, which keeps the Japanese yen weak, as the US rate is around 5.5 percent and the Japanese rate is around 0.

wage increases need to be offered by all companies or as many as possible, for example large companies, midsize companies, and small companies too. If not there is going to be, if not already, an economy of haves, meaning large companies workers and have nots meaning midsize and small company workers who didn't get a wage increase or not as much as large company workers.

And yes, small and midsize companies might not have the resources that large companies have and their profit margins just can't afford wage increases compared to large companies.

Of course in a market economy there are always going to be some better off, large companies and those not so better off, small and midsize companies, who don't have the resources of the large companies.

The Prime Minister can pressure companies but companies don't have to follow exactly what the Prime Minister asks as its only a suggestion and not a law, and maybe many companies still have weak profit margins and maybe don't have any room for the size of wage increases the Prime Minister is suggesting of 5% + wage increases. 

Nominal wages are not the most important indicator as real wages tell the real story and they show what the effect is on the average Japanese workers.

If for example if inflation was not as high or continuous and the Japanese yen was not as weak, and the US rate and Japanese rate were close to being equal, then the Japanese economy might be more calm and relaxed and companies then could easily increase wages as needed to meet the Prime Minister's suggestions. 

Most Japanese households probably still feel inflation and are still cutting back on some things in their budgets as maybe consumer sentiment, or consumer feeling is not so good right now, meaning Japanese consumers are not spending as much, due their the downbeat feeling, continued inflation, and a decrease in real wages.

But that seems to be the nature of the Japanese economy, as is it never reaches its potential and consumers spending, being about 50% of the Japanese GDP is never where it should be in the 4th largest economy in the world.

You would think the younger generations of Japanese workers would be the big spenders in the Japanese economy, but that is not what is happening as pensioners are leading the way in spending in the Japanese economy, as a recent article suggested.

As indicated, the challenges is not nominal wages for full-time workers at 438,696 yen, but the real challenge is the sad state of affairs for contract workers and part-time workers in Japan at 105, 989 yen. 

There might be a significant set of the Japanese population that work either part-time and or contract work at lower wages than full-time workers.

Unfortunately, maybe many Japanese companies have adopted western style business practices and have used contract workers and part-time workers a lot as a way to reduce costs in their companies.

Its not good for the Japanese economy, or any economy, or society, which just uses a lot of part-time workers and contract workers as an economy can grow to its maximum without normal wages.

Have a nice day and be safe!

Japan And Real Wages: Updated May 11, 2023.

 

Japan's real wages fall in March for record 24th month

Article Source:  https://mainichi.jp/english/articles/20240509/p2g/00m/0bu/021000c

Ideas:

Most likely, what has happened in Japan, for the last few decades, is large Japanese companies, as especially those companies that are publicly traded, has shifted the emphasis from stakeholder emphasis to shareholder emphasis, and focusing on quarterly results, which means employees, were not given many wage increases as companies again, focused on shareholders and not employees.

So after decades of maybe not many wage increases the Japanese economy is stuck in stagnation, and even though wages were increased, in April of 2023, if wasn't near enough to get the Japanese economy out if its current stagnation phase, as wages are only once a year while inflation can be monthly,

There is as strong synergistic effect meaning, as household purchasing power continues to be eroded it can affect many different areas related to consumer spending in the Japanese economy.

Nominal wages are wages with inflation, and don't really tell the exact story. So though wages, including overtime, might seem good, what isn't explained is how much inflation takes away from the real wages over time.

Nominal wages might have increased by 0.6 percent but inflation might have increased by 3.5 percent, so there is a real difference between wages and inflation, which makes wages even less. which means less buying of many things in the Japanese economy. 

Most Japanese workers don't work for the large name-brand companies but small and midsize companies, which is similar to most economies in the world, as most workers, globally, don't work for the large name-brand companies.

The fact that only 20 percent of small and midsize companies were able or willing to increase wages by more than 5 percent, might be an indication they are still concerned with the future of the Japanese economy and or their bottom lines and profit margins just don't allow for much in terms of wage increases this year.

So what is going to happen to the 80 percent that didn't increase wages by 5 percent. Most likely, they might have hiring challenges related to new employees, as their wages might not be enough to satisfy an younger worker who is looking for a good competitive salary, and or a older worker, who still has many years left but is looking for something better.

Real wages is important compared to nominal wages. If real wage growth is more than inflation that means Japanese consumers, or those who got wage increases now have more purchasing power compared to inflation.

But, again, what about the 70's percent of the small and midsize companies that only saw 20 percent of them getting a wage increases of 5 percent or more. That means many small and midsize workers will be stuck, again, without the needed wage increases that is more than the inflation rate.

Which then means many Japanese households or Japanese consumers will not have the needed purchasing power to buy what they want or need, beyond their basic needs and or paying their monthly household bills.

By sector, the services sector was hit the hardest by the pandemic and had to layoff many of its workers and or reduce their hours during the pandemic. 

Now that the pandemic id finished, the services sector is trying to play catch-up with hiring and wages to remain competitive with other sectors.

At the same time, there is a so-called labor shortage in Japan and companies including those in the services sector, are trying to increase wages to get the best possible talent available, and that again, might mean better wages and better work/life experiences.

Each economy is different as its not good to compare one economy to another but wages in Japan compared, to other OECD countries, has decreased overtime, and, again, wage increases in the Japanese economy has not kept up with wages in the EU or the US.

One might say things might be cheaper in Japan compared to the US or the EU, and that is true for many things, but ask the average Japanese household and they might not agree.

The number of hours worked is decreasing each year, as the Japanese, for many, are not the workaholics that stereotypes as someone would describe the average Japanese worker.

That might have been the way it was in the 60's, 70's and 80s' etc. but in the 2000's and beyond the average Japanese workers wants to have their private lives and work lives separate from each other.

Have a nice day and be safe! 

Japan Real Wages Fall: Updated April 30, 2024.

 

Japan real wages fall for 2nd straight year amid rising inflation

Article Source:  https://mainichi.jp/english/articles/20240206/p2g/00m/0bu/015000c

Ideas:

Real wages are wages with inflation and basically the wage increases in April of 2023, wasn't enough to cover the continuous increases in inflation each month.

Wage increases usually only happens in April, the beginning of the new business fiscal year in Japan, but inflation is a monthly situation and there is not just one time inflation increases but basically every month.

The 2014 consumption tax or sales tax situation was a situation in Japan, that saw consumer spending decrease significantly in April of 2014, but consumer spending did rebound as consumers and households got used to the sales tax increase.

Household spending or consumer spending is always a challenge for the Japanese economy, as maybe Japanese consumers/households are not the like the free-spending US consumers, as maybe they are more inclined to save instead of spend.

Nominal wage increases, including overtime pay might sound good, but it also includes inflation increases, which gives it an inflated picture of what is really going on.

Its quite possible, because of energy costs and raw material cost increases maybe small and midsize companies just don't have room in the profit margins to offer wage increases similar to what large companies can offer.

Most likely, like most economies, most workers don't work for the large name-brand companies but instead work for the millions of small and midsize companies. Large companies, especially the name-brand companies, these days, get all the news but, again, most workers in every economy don't work for large companies.

If small and midsize companies begin to see enough large companies increasing wages, and then if they begin to hear that some small and midsize companies too, are increasing wages, it become a multiplier effect situation and snow-ball throughout the rest of the Japanese economy.

The reason is Japan is facing a labor shortage and companies, large, midsize, and small need to increase wages to get the best talent possible. If they don't increase wages as an incentive, they are not going to get anyone to work for their company.

Of course, unfortunately, the regional areas, with smaller population bases are going to suffer the most, as many young workers, educated and less-educated don't want to work in regional areas but instead want to work in Tokyo, Osaka, Kyoto, Nagoya, and so on.

December alone, because of the double holiday period in Japan, meaning the Christmas period and the end of the year period, might have seen prices increases during those times, and at as the same, real wages decreased due to price increases.

Some might say a real percent drop of 2.6 percent is not much, but at the same time its more of an average and maybe most likely for some households consumer spending decreased a lot more than 2.6 percent and the upper-income group were probably around the 2.6 percent average, and the lower-income group probably decreased spending even more than 2.6 percent.

Not to get too much on a rant here, but its unfortunate that Japanese students have to go to after-school programs for extra study just to get into the so-called prestigious elementary, middle, and high school, and of course universities.

Its even worse in South Korea and China, where students spend up to midnight taking extra study classes.

Again, maybe most households spent less than the average mentioned here, or maybe many lower-income households spent much less and of course maybe the upper-income groups spend much more.

Its sad that parents have to spend on educational expenses just to keep up with the so-called whomever in society. Think of the stress children/students have to go through just to get into a so-called prestigious school, just to make them or their parents feel good.

Food for the average household might be about 30 percent of household spending, but for the lower-income groups its probably much more than 30 percent, as they have to use more of their limited income on food.

And the same for the upper-income groups that maybe use less than 20 percent of their income on food.

Maybe many household goods are not an everyday every week or even an every month purchase, and as they see the prices increase they might decide to just wait.

Here in South Korea there are still some people wearing masks but its much less than a year ago, but everyone wears one at a hospital or a pharmacy.

Its natural that people want to get out and about instead of just staying at home like during the pandemic.

But its interesting that household spending decreased in December, as it might have been related to price increases in December and consumers/households didn't want to spend that much during the holiday period or the New Year period.

Private consumption, consumer spending, or household spending is always a major challenge for the Bank of Japan and the Japanese economy, as it seems Japanese consumer just don't spend as much as US consumers.

For example December is a major shopping and spending month in the US, and many companies finally get into the black for the first time all year.

But maybe Japanese households or consumers, despite all of the Christmas sales, advertisements and so on in Japan, don't just spend like, again, US consumers.

Have a nice day and be safe!

Japan Household Spending: Updated Feb. 15, 2024

 

Japan's household spending in Oct. falls 2.5% due to hot weather

Article Source: https://mainichi.jp/english/articles/20231208/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Japan's household spending in October fell 2.5 percent from a year earlier, down for the eighth consecutive month, as the unusually warm weather drove up prices of some vegetables and prompted people to refrain from buying, government data showed Friday.

Households of two or more people spent an average of 301,974 yen ($2,097), the Ministry of Internal Affairs and Communications said. The rate of decline shrank slightly from a 2.8 percent drop in September.

Ideas:

Sometimes consumer buying is tied to the weather and sometimes the weather affects the growing seasons of fruit and vegetables. Most likely the drop in consumer spending might be related to a not so good growing season and an unusually hot summer, which delayed consumers buying winter clothes.

Of course the continued inflation challenge in Japan has forced Japanese consumers to reduce or limit their spending which might have been a factor too.

So a 2.8 percent drop in September and a 2.5 percent drop in October is a good sign that Japanese consumers are continuing to limit spending and or cutout spending on things they don't need.

Article:

The weak spending came as separate data showed inflation-adjusted real wages in October dropped 2.3 percent from the previous year for the 19th straight monthly fall, as wage growth failed to keep up with rising prices.

Nominal wages rose 1.5 percent to 279,172 yen for the 22nd consecutive month of growth, according to the Ministry of Health, Labor and Welfare.

The hotter-than-usual weather for the month led to lean harvests of tomatoes and green onions, driving up their prices, and prompted consumers to cut back on spending. The weather also slowed sales of other cold weather items, the internal affairs ministry said.

Ideas:

Real wages are adjusted for inflation and as inflation continues in Japan, wages might has less purchasing power if wages don't keep up with the rate of inflation.

Again, green onions and tomatoes were affected with a less than good growing season due to the hot weather.

And yes, because of the hot summer months, which was a record in Japan, decreases the buying of late fall and winter clothes.

But this is normal buying behavior in any country not just Japan, when the growing season drives up prices of fruits and vegetables and there was/is hotter than usual summer, which lasted into October.

Article:

By category, food expenditure, accounting for a third of household spending, fell 4.4 percent as people spent less on vegetables, seaweed and prepared food. Spending on preprepared lunch boxes such as sushi also declined.

Outlays on furniture and household products dropped 12.9 percent, led by durable items such as stoves and heaters amid the high temperatures. Spending on clothing and shoes also fell due to sluggish demand for winter fashion.

Ideas:

It appears spending on many things in Japan decreased as maybe Japanese consumers continue to cut back on things they don't need.

And again, the very hot summer in Japan, which lasted into October delayed to buying of stoves and heaters, which are important in Japan, as Japanese homes don't have proper heating compared to homes in other countries.

Spending on food might be a third of Japanese household spending but for the lower-income groups it might be even more as lower-income groups use more of their income on food than the higher-income groups.

Most likely, department stores, convenience stores, called conbinis in Japan, and specialized bento stores might be seeing large decreases in prepared lunch boxes called bentos in Japan.

Article:

"Prices are rising in general, but we think these spending patterns are largely attributable to the hot weather," an official at the ministry said.

In contrast, expenditure on transportation and communications grew 5.3 percent, as an easing chip shortage increased vehicle production and led to more purchases.

Household spending data is a key indicator of private consumption which accounts for more than half of the country's gross domestic product.

Ideas:

Agreed, for the most part, the super hot summer in Japan, which lasted longer than usual well into October might have affected the buying patterns of Japanese consumers as they delayed the buying of thing related to late fall and winter.

At one time, in 2021, or around that time, talking to a Japanese person on Skype, they said it is taking 6 months to get a new car order because of the semiconductor chip shortage related to new cars.

Household spending might account for half of Japanese GDP but, consumer spending is always a challenge as Japanese consumers don't spend like US consumers, and Japanese consumers/households are more savers than spenders.

And now add in inflation and maybe spending by Japanese consumers is less than needed or expected to increase economic growth.

Have a nice day and be safe!