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Household spending down 3% in June

JIJI

The average consumption spending by households fell 3 percent in June compared with a year earlier, in price-adjusted real terms, due to sagging demand after the consumption tax hike on April 1, the Internal Affairs and Communications Ministry said Tuesday.

The reading compared with the median forecast of a 3.9 percent decrease in a Jiji Press survey of 23 economic research institutes.

The average spending by households with at least two members stood at ¥272,791 in June, the ministry said.

The ministry also reported that the average income for wage-earning households in June stood at ¥710,375, down 6.6 percent in real terms and 2.5 percent in nominal terms. Of the income, the disposable portion shrank 8.0 percent, to ¥568,874, the steepest decline since March 2003.

Income growth has yet to catch up with rising prices, analysts said.

Although the average spending extended its downtrend, the decline pace decelerated from an 8.0 percent drop in May, a ministry official said. Compared to May, the official said, average household spending rose 1.5 percent in real terms.

The ministry kept its assessment unchanged, saying that household spending is picking up.

According to the June data, expenditures dropped 20.1 percent for durable goods, such as refrigerators and washing machines, and 9.3 percent for automobiles. Spending on domestic and overseas trips also fell markedly.

But home refurbishment spending jumped 19.8 percent, after plunging in May.

In nominal terms, the average family spending increased 1.3 percent due to price rises.