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Gift certificates, gas coupons, expensive school lunches and reduced houshold spending

A few stories concerning consumer spending and behavior caught my eye today. First, the Japan Times tells us that an increasing number of shoppers are buying discount gift certificates for themselves, in order to cut down on food and clothing costs. According to the paper, gift certificates can be usually be bought for as much as a 2% discount on their face value, though department store gift certificates are selling at shops in Shimbashi for as much as a 5% discount.

Then, we hear from the Nikkei that supermarket giant Ito Yokado plans to hand out gasoline coupons starting tomorrow. The campaign will last until next Monday, and each shopper who spends over 5,000 yen will receive a coupon good for 10 yen off per liter of gas, up to 50 liters. Each customer is limited to two coupons. Read more

Japan’s household spending down 3.2% in May - Spending on services slid 7.64%

Prior to the release of May’s household spending figures, a Kyodo News survey forecasted a 2.2% fall in spending. The results, however, were worse than expected: According to data released Friday by the Ministry of Internal Affairs and Communication, Japan’s household spending fell 3.2% in May.

May was thus the third consecutive month with a fall in consumer spending, following April’s 2.2% decline and a drop of 1.6% in March. According to the Statistics Bureau, spending at households with two or more people came to 288,128, down 3.2% from a year ago. Income at households with a salaried worker as head of household came to 435,076 yen, which was down 0.6% from a year ago, while spending at workers’ households was at 315,152 yen, down 0.9% from last year.

Here’s a breakdown of spending per category, along with changes against May of last year: Read more

Household spending down 2.7% in April; spending on services down again

Last Friday, the Statistics Bureau released its household spending figures for April. Apparently, these figures surprised many observers, who were looking at something in the range of a 1% fall year-on-year. The 2.7% reported fall in April household spending came as no surprise in these quarters, as the reasons for steep decline were laid out in last month’s post on this topic.

April was thus the second month in a row with a drop in household spending, after it fell 1.6% in March. According to the Statistics Bureau, spending at households with two or more people came to 310,695, down 2.7% from a year ago. Income at households with a salaried worker as head of household came to 469,774 yen, which was down 1.6% from a year ago, while spending at workers’ households was at 343,586 yen, down 0.6% from last year.

Here’s a breakdown of spending per category, along with changes against April of last year: Read more

Japan’s household spending down 1.6% in March - durables hit harder

With food and fuel prices surging, Japan’s consumers have expressed their lowest degree of sentiment in nearly five years. In the face of sluggish wage growth, we have been expecting to see households begin to tighten their belts and rein in spending. After seeing increases of 2.2% in December and 3.6% in January, February’s household spending came out flat. In March, household spending decreased 1.6%, for the first drop reported since November of last year.

According to the Statistics Bureau, spending at households with two or more people came to 312,565. Income at households with a salaried worker as head of household came to 453,482 yen, which was up 0.6% from a year ago, while spending at workers’ households was at 342,868 yen, down 0.2% from last year.

Here’s a breakdown of spending per category, along with changes against March of last year: Read more

A closer look at Japan’s February household spending: Durables and services expenditures hit hard, as predicted

Last Friday a brief post went up noting that household spending had been reported to be unchanged year-on-year in February. Then, the Statistics Bureau’s website started acting funny, and was inaccessible when I went to download the Excel charts last night. This morning I checked the site to discover that the Statistics Bureau has done a full redesign. It certainly looks better than before, though I miss the handy links that had been running down the left-hand side of the page. At least they flushed that money down the toilet before the end of the fiscal year…

Although the website itself changed, household spending did not in February. After seeing increases of 2.2% in December and 3.6% in January, it appears that households may have tightened their belts a bit in the face of rising prices and did not open their wallets so freely in February. According to the Statistics Bureau, spending at households with two or more people came to 275,827, which was unchanged against a year ago. Income at households with a salaried worker as head of household came to 476,282 yen, which was down 0.1% from a year ago, while spending at workers’ households was at 298,539 yen, up 1.4% from last year.

Here’s a breakdown of spending per category, along with changes against February of last year: Read more

Japan February CPI up 1.0%, Unemployment up 0.1%, Household Spending Unchanged

We will be getting into these figures a bit more later in the day, but for now just a quick note on the numbers released this morning by the Ministry of Internal Affairs and Communications:

February 2008 Nationwide Consumer Price Index: +1.0%
March 2008 Tokyo CPI: +0.6%

Unemployment: 3.9% (+0.1 from January)

February 2008 Household Spending: Unchanged at 275,827 yen from last year
Monthly household income: 476,282 yen, -0.1% from last year

Business Conditions, Capital Spending, Industrial Output all Down, Yet Consumer Spending Holding Up

The Cabinet Office published its monthly Index of Business Conditions for January earlier today, and we have seen a decline in all three indexes for the first time since September of last year. This report generates three scores, which are referred to as diffusion indexes. The three categories reported are the leading index, the coincident index, and the lagging index. The leading index is meant to evaluate business sentiment for the future, the coincident index measures sentiment in the current period, and the lagging in the period previous to the report. For each index, a score below 50 indicates pessimism, while a score above 50 indicates an optimistic result.

January results showed the Leading Index falling from 50.0 in December to 30.0 in January, while the Coincident Index dropped from 63.6 to 22.2 and the Lagging Index fell from 66.7 to 62.5 (incidentally, we have not seen all three indexes below 50 since February 2007).

The fall in the Leading Index is what tends to worry economy watchers the most. Although it stood exactly on the fence at 50 in December (a figure which has since been revised down to 45.5), the score had seen an encouraging rise from the previous four months, when it checked in at 25.0, nil, 16.7 and 16.7.

Just last week we noted that industrial output had slid 2.0% in January, and that figure seemed to have been caused by nervousness over the course of the US economy. The Leading Index supports that supposition, though fears may be even reach beyond worries over the US economy.

To make matters worse, on Wednesday the Ministry of Finance announced that capital spending fell at its steepest pace in five years during the October-December quarter. According to the Ministry’s data, capital spending declined 7.3% during the fourth quarter, greatly exceeding the expectations of most Japan watchers. Read more

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

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…

December household spending up 2.2 percent, household income down 2.7 percent

After Japan’s average household spending fell 0.6% in November and energy and food prices continued to rise, most forecasters had predicted that December’s figures would show lower growth, or perhaps slide back into negative territory. However, contrary to such expectations, December’s household spending figures showed a rise of 2.2% from the previous year, reaching 351,667 yen, according to data released by the Statistics Bureau.

At the same time, household income took a hit in December, slipping 2.7 percent, as the income of household heads declined 2.0 percent. At the same time, income from bonuses fell 1.1 percent and disposable income was 3.6 percent lower than a year ago. These figures leave little room to be optimistic for January’s spending figures.

We have to admit that these numbers initially seemed surprising, as we suspected growth in household spending would be restrained by belt-tightening as the winter truly hit. We know that average wages showed a 0.1% uptick in November, but that hardly seems like enough to have caused a spending spree. So what did households increase their spending on in December? Here’s a breakdown: Read more

Japan’s household spending down 0.6% in November, Wages down 2.1%, Retail sales up 1.6%

After we saw a 0.6% rise in household spending in October, purses tightened across the nation in November, and household spending fell by 0.6 percent to 282,836 yen, according to data released by the Statistics Bureau on Friday. September had seen a much more encouraging 3.2% growth in household spending.

Despite the decline in household spending, we also learned that retail sales increased 1.6% in November, which means that they have now been on the rise for four consecutive months. The news was not necessarily rosy for all retailers, as the push in sales was driven by higher gasoline and fuel prices. At large retailers, sales were up 0.4 percent.

Back to the households: In October, we had seen a rise of 0.4% in income at workers’ households with two or more people. In November, however, household income fell by a worryingly fat 2.1 percent. With oil and gasoline prices still high, and December being a colder month, it’s hard to imagine that retailers will be seeing an increase in expenditure for December. Read more

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