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Japan’s Consumer Confidence shows first rise in six months in September

October 14, 2008
By Ken Worsley


After declining for five straight months and hitting an all-time low for the third month in a row in August, Japan’s Consumer Confidence Index finally showed a gain in September, moving up 1.3 points to 31.4. That score matched the figure seen in July.

The Consumer Confidence Index itself contains five scores, each of which is considered positive when above 50, and pessimistic when below the 50 mark. Here’s a breakdown for September figures, with the change from last month:

  • Consumer Confidence Index: 31.4 (+1.3)
  • Overall Livelihood: 30.6 (+2.1)
  • Income Growth: 35.8 (+0.8)
  • Employment: 28.9 (+0.5)
  • Willingness to buy durable goods: 30.3 (+2.0)

Most notably, all five categories saw a rise in September, for the first time since April 2007 - though at that time, the Consumer Confidence Index stood at 47.4, 16 points higher than it is now.

This news was released just as Japan’s stock markets opened, and the benchmark Nikkei 500 Index saw a 14.2% increase, its largest in history. Still, strong downward pressure remains on consumer confidence, and thus prospects for near-term consumer spending. Consumer prices were up 2.4% in both July and August - though it is starting to look as though the spike in CPI increases will begin to slow soon - and wages fell in August.

Finally, a side note: A bit of an oddity from Forbes/Thompson Financial, which erroneously reported today that Japan’s consumer sentiment declined in September. Scrolling down to the bottom of the article, the reason for the mix-up becomes clear: September’s figures are being compared with June, rather than August. The figures for March and December are then listed. The Cabinet Office, however, stopped reporting consumer confidence on a quarterly basis back in 2004, as can be seen in this Excel sheet. Here’s to hoping it will be corrected by the time anyone clicks on it.

Filed Under Cabinet Office, Consumer Confidence Index, Economic Reports 

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Comments

4 Responses to “Japan’s Consumer Confidence shows first rise in six months in September”

  1. Tom Glocer on October 16th, 2008 6:20 pm

    Speaking of corrections, it’s “Thomson” (Thomson Reuters).

    As far as Japanese consumer confidence goes, this picture says it all. <- safe for work

  2. Steven Towns on October 17th, 2008 10:46 pm

    Ken, how about the reversal in oil prices — perhaps we’ll see a back-to-back rise in the CC reading. That said, will it translate into meaningful spending …? As I recently said on my site, U.S. consumers “can’t” spend and JP consumers “won’t” (will continue not to). Hard to get overly excited even with the year’s end rapidly approaching. Kampai!

  3. Ken Worsley on October 18th, 2008 12:22 am

    Steven,

    Phew…this is exactly what has been on my mind all week and I’m still pouring through reports and numbers. CC readings translating into spending? No guarantee whatsoever - Economy watchers is still down, though by much less. Lower oil prices were blamed for the deflationary situation seen in the first three quarters of 2007, which was universally seen as bad by those who put out the stats - it was as though they were praying for higher oil prices to come in order to boost “core” CPI - and now it’s a bugbear. I was talking with someone tonight about where oil prices will be in November - which will really matter for CPI readings going into 2009.

  4. Japan’s consumer confidence hits all-time low in October Japan Economy News & Blog - Business, Economy, Marketing and Economic Reports on November 12th, 2008 10:14 pm

    […] category taking a heavy beating. Last month’s post on the consumer confidence index revolved around declining oil prices and whether or not this would help spur consumer spending in th…. I remain pessimistic on this front. Clearly, consumers are worried about their employment […]

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