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Japan’s household spending jumps 3.6% in January, beating forecasts

March 1, 2008
By Ken Worsley


The Statistics Bureau released its report on household spending yesterday, and the results were surprising, to say the least. According to the data, household spending in Japan increased 3.6% against a year ago. Many forecasters had predicted a decline in spending for January, with Thomson/IFR Markets foreseeing a 0.4% decline in spending. We also had assumed that higher fuel and food prices would force households to tighten their belts in January, though not to the point of causing negative growth in household spending.

At any rate, the government reported that household spending in January hit 309,826 yen, with spending on automobiles, flat-panel TVs, mobile phone services and domestic package tours being particularly high. As we learned in the most recent Consumer Price Index report, flat-panel TV prices are falling, while cellular phone fees are down about 4% from a year ago. We find these results somewhat surprising, as the Consumer Confidence Index shows a continually declining score for the “Willingness to buy durable goods” category.

We should note that households spent less on food, and this makes sense. Supermarket sales continue to decline, and food prices continue to rise.

Despite the decline in spending, risks remain. The government’s report also stated that income at households fell 1.4 percent, with the income of household heads down 1.6 percent. Income earned from bonuses dropped 1.1 percent and disposable income slid 3.6 percent.

This looks like a similar situation to last month, and yet household spending rose. Perhaps we’re finding out more as to why Japanese households are saving less and less money…

Filed Under Economic Reports, Household Spending 

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Comments

7 Responses to “Japan’s household spending jumps 3.6% in January, beating forecasts”

  1. Willie on March 3rd, 2008 4:18 pm

    How reliable are the statistics? How are they derived? Many people consider US statistics from the government or other powerful institutions to be rather bogus.

  2. Contrarian on March 4th, 2008 7:13 am

    “We should note that households spent less on food, and this makes sense. Supermarket sales continue to decline, and food prices continue to rise.”

    Does this make sense? Did they spend less on food, or were they buying their food from other stores (as was mentioned in your other post about this) and the datapoint is slightly misrepresented.? It seems like spending on food should have gone up with the prices (unless the people are trying to be even skinnier).

    “As we learned in the most recent Consumer Price Index report, flat-panel TV prices are falling, while cellular phone fees are down about 4% from a year ago. We find these results somewhat surprising, as the Consumer Confidence Index shows a continually declining score for the “Willingness to buy durable goods” category.”

    This is really interesting.

    Thanks for sharing Ken.

  3. Ken Worsley on March 4th, 2008 10:03 am

    Contrarian, that is a confusing sentence, sorry. Households spent less on food overall, according to the household spending data (the ministry’s website crashed this weekend, I have to update this post). Supermarket spending was also down. The two were actually separate.

  4. madmilker on May 12th, 2008 4:35 am

    u who! you nice people had better do as the people in America……with your wages headed south and spending more adds up to a train wreck. Get so tight with your yen that your breath smells like sh!! and you squeak when you walk……and support your country with buying…..made in Japan items that’s why the people of China are doing so good…..they have to buy made in China….Quote***In China, as elsewhere, we follow the Wal-Mart tradition of building our business one store and one customer at a time. We strive to provide our customers with friendly service and a wide selection of quality products at Every Day Low Prices. With each Wal-Mart store we bring advanced retail know-how to the local market. By fostering a healthy, competitive environment, we hope to constantly improve our business operations and customer service in order to contribute to the prosperity of the local economy.

    Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. At Wal-Mart, we always work with our suppliers to grow together. In August 2007, Wal-Mart once again secured the top spot of the 2007 Supplier Satisfaction Survey conducted by Business Information of Shanghai. Additionally, Wal-Mart directly exports about US$9 billion from China every year. The export volume by third party suppliers is also estimated to be over US$9 billion.***end quote!

    The nice people of South Korea and Germany support their Country….that is why you don’t see a Wal*Mart !

  5. Ken Worsley on May 12th, 2008 9:57 am

    Madmilker,

    Do you have a source for those quotes?

  6. madmilker on July 20th, 2008 8:48 am

    Ken Worsley……if you ain’t run down them ther “quotes” by now….please feel free to check out tat company tat has the star above the door China web page! Yes…it came rite from tat horses mouth. good day and remember….support your town…shop around!

  7. Ken Worsley on July 20th, 2008 2:09 pm

    Madmilker, should I take that as a no? Let us know if you have a link to the source.

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