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Japan household spending down 3.5% in February

March 31, 2009
By Ken Worsley


According to data released today by the Ministry of Internal Affairs and Communications, household spending in Japan fell 3.5% in February on a year-on-year basis. February is thus the twelfth consecutive month in which household spending figures have fallen when measured against those of a a year ago.

Average spending at households with two or more persons came to 266,044 yen, down 3.5% from a year ago, while spending at those households with a worker as head of household fell 1.0% to 295,494 yen. Wages at workers’ households fell 2.4% to 464,665 yen.

In terms of spending at households with two or more persons, here’s a breakdown by category:

  • Transportation & communication: 37,046 yen (+15.7%)
  • Housing: 14,389 yen (+0.9%)
  • Education: 12,488 yen (+0.7%)
  • Furniture & Household Goods: 7,058 yen (-15.0%)
  • Clothing & footwear: 8,879 yen (-12.9%)
  • Medical care: 11,907 yen (-10.4%)
  • Fuel, electric and water: 27,931 yen (-9.4%)
  • Food: 61,719 yen (-5.9%)
  • Culture & recreation: 27,708 yen (-0.1%)
  • Other: 56,919 yen (-7.3%)

Seven categories were thus in negative territory in February, with the top two taking a major hit as households tighten the purse strings. Clothing and footwear expenditures rarely drop below 10,000 yen in a single month - the last one I remember was August 2008, when it stood at 9,945 yen. In February 2008, the average household spent 10,215 yen on clothing and footwear. Although 2008 was a leap year, the decline in spending still seems significant, as the average daily spending in February 2009 was about 9,501 yen versus 9,511 yen a year ago.

One more aspect of the survey that hasn’t been reported: The average number of persons per household fell from 3.12 to 3.11 in February 2009. A year ago this figure was at 3.13, and two years ago it stood at 3.15. The demographic decline shows no sign of abating, and so long as this downward trend continues, it will remain difficult to envision sustained increases in household spending.

If there is some good news to be taken from this survey, it is that the decline was not as strong as the 4.6-4.7% that had been expected by media sources. January’s 5.9% drop and December’s 4.6% decline were certainly stronger, and February spending was up about 1.05% on January when measured on a daily basis. The average household in Japan spent about 9,501 yen per day in February.

Still, worsening unemployment shows that there are still fears that the job market is weak and has not yet bottomed out - the number of unemployed in February was 12.9% higher than a year ago, as the unemployment rate increased to 4.4% in February from 4.1% in January.

Total spending on goods and services fell 2.26% in February to 236,271 yen. Breaking that down further, spending on services rose a minuscule 0.35% to 99,716 yen while spending on goods fell 4.10% to 236,271 yen.

Disposable income also fell at the average household in February, by 3.13% to 390,292 yen, after having seen a 0.58% rise in January.

Filed Under Economic Reports, Household Spending 

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Comments

5 Responses to “Japan household spending down 3.5% in February”

  1. Sue | SA Commercial Propery on April 2nd, 2009 5:28 pm

    I think that household spending has dropped all round the world and not just in Japan. With the financial crises that is happening. People just don’t have the money to spend that they did a year ago. Times are tough and people are loosing their jobs too. I just hope that this starts coming right by the end of the year.

  2. Ken Worsley on April 3rd, 2009 9:59 am

    And?

    Is that a comment or a spam ad? I took the link out of the comment since it looks like a spam ad, telling us nothing new or insightful.

  3. 俳論 on April 3rd, 2009 9:49 pm

    I was wondering if you could explain what
    Housing: 14,389 yen (+0.9%)
    includes.

    Is this rent / mortgage on a property? If so it seems incredibly low.

    If the change in average numbers per household is taken into account does this significantly change or ameliorate the decline in spending, obviously there would be some reduction but without knowing the ratio of occupants in each subgroup it is difficult to determine from the figures.

  4. Ken Worsley on April 4th, 2009 12:18 am

    Hairon, this question comes up from time to time.

    “Housing” is probably not the best translation of this category, but it’s what the Statistics Bureau gives.

    Note that the overall spending figures do not include “housing, purchase of vehicles, money gifts and remittance.”

    In other words, they have a category that is not included in the report! The “housing” category included in the report seems to refer to expenses on refurbishments and upgrades to existing structures - but not on rent or mortgages. It’s better explained here: http://www.stat.go.jp/data/kakei/sokuhou/tsuki/index.htm

  5. J on April 4th, 2009 9:30 pm

    good article, even if Japanese people have the money to spend they will be less likely to do so due to fear and also they are followers-group mentality-come to think of it, so is the rest of the world, sorry Ken-I said nothing substantial but at least there is no spam

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