Consumer sentiment weakened in September as the country grew increasingly concerned about the future of the economy, the Cabinet Office said Tuesday.
“We effectively downgraded the overall assessment of consumer sentiment in September for the first time in three quarters,” said Yoshihiko Senoo, director of the office’s Economic and Social Research Institute.
According to the Cabinet Office’s quarterly survey, the consumer confidence index as of Sept. 15 edged up 0.3 point to 39.6 on a seasonally adjusted basis compared with the previous survey in June, marking the third straight quarter of improvement. The narrow margin of increase, however, shows that sentiment may be turning.
“Some signs of improvement were seen,” Senoo said, “but it is necessary to note that the margin of the rise in the index has become smaller.”
The improvement followed quarter-to-quarter rises of 0.9 point in the June survey and 1.5 points in the March survey.
The index is designed to gauge consumer expectations for the coming six months in five categories — employment, prices, attitudes toward overall livelihood, income growth, and inclination to purchase durable goods.
The index is calculated by assigning points on the basis of whether consumers believe conditions in the coming six months will “improve,” “improve somewhat,” “remain unchanged,” “deteriorate somewhat,” or “deteriorate.”
The results of the survey are widely considered to indicate what national spending trends will be in the upcoming three months.
Two of the five categories improved in September while the other three deteriorated.
The indexes that fell were the overall livelihood index, down 0.2 point to 39.6, the income index, down 0.9 point to 37.6, and the employment index, down 1.6 points to 29.
The indexes that rose were the price index, which rose 3.5 points to 47.5, and the willingness to buy durable goods index, which edged up 0.2 point to 44.5.
One of the more notable results of the survey was the 3.5-point surge in the price index, the fifth-biggest rise since June 1982.
Senoo said the surge was a major factor behind the overall improvement in the sentiment index because the price index is counted as a positive factor for consumer confidence. It is interpreted as meaning that more consumers expect prices to fall in the future.
The rise in the price index, therefore, reflects strong deflationary pressure, he said.
Deflationary pressure is considered a cause of the prolonged economic slump in Japan.
If the price index had been excluded, consumer sentiment could have fallen 0.5 point in September from June, although the implications of the price index for overall consumer sentiment requires much more discussion, he said.
The September survey covered 5,040 households in Japan, excluding single people and non-Japanese. Of those surveyed, 99.9 percent, or 5,038 households, responded.
The Cabinet Office also said in another survey that, as of Sept. 1, the consumer confidence index for single-person households rose 0.3 point from three months earlier to 41.2 for the second straight month of rise.
The survey covered 1,300 such households, excluding students, and received a 98.4 percent response rate.