Japan household spending falls 3.1% for a ninth month; August's rise misses forecasts
Japanese household spending, adjusted for inflation, fell 3.1% in August from a year earlier, less than the 3.6% drop economists expected, while the rise from July was 0.1% against a 0.5% forecast, the government said on Friday, October 9.
Key takeaways
Japanese household spending fell for a ninth straight month in August, a smaller annual drop than economists expected, while the rise from July fell short of their forecast.
Japan's Statistics Bureau said spending was 3.1% lower than a year earlier, once inflation is taken out. Economists had expected a 3.6% drop, matching the decline in July.
Consumer prices rose 1.9% in August from a year earlier, unchanged from July.
Set against July, with the usual seasonal swing removed, spending rose 0.1%. Economists had expected a 0.5% rise. The result missed that forecast by 0.4 percentage points.
From a year earlier, spending on food fell again, by 1.4%, and spending on utilities fell 5.2%.
Wages, adjusted for inflation, rose 1.5% in August, an eighth straight gain, the labor ministry said on Wednesday, October 7.
In September the Bank of Japan raised its policy rate to around 1.25% from around 1%. It said it would continue to raise that rate in response to developments in the economy, prices and financial conditions, and that it would judge the timing and pace.
The Bank meets on October 29 and 30 and will publish new forecasts of growth and inflation.
In the spending figures, the annual drop beat the forecast. The rise from July did not.
Frequently asked questions
How much did household spending fall in August?
Inflation-adjusted spending fell 3.1% from a year earlier, a smaller drop than the 3.6% economists expected.
Did spending rise from July?
Spending rose 0.1% from July, short of the 0.5% gain economists had forecast.
What happened to real wages?
Wages adjusted for inflation rose 1.5% in August, an eighth straight gain.
When does the Bank of Japan meet next?
The Bank meets on October 29 and 30 and will publish new forecasts of growth and inflation.
