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Household spending drops for ninth consecutive month

Kyodo

The nation’s household spending declined for the ninth consecutive month in November, the government said Tuesday, reflecting consumers’ continuing preference to save money rather than spend.

The government also said the unemployment rate remained low at 3.1 percent in November despite a 0.1 point increase from the previous month. Separate data showed the country’s job availability improved to 1.41 in November, meaning that 141 positions were available for every 100 job seekers, the best level since July 1991.

Household spending, a key indicator of private consumption, dropped a seasonally adjusted 1.5 percent in November from a year earlier to ¥270,848 ($2,311), the Ministry of Internal Affairs and Communications said.

Spending on food decreased 3.4 percent from a year earlier due partly to rises in vegetable prices amid unstable weather conditions, while outlays for clothing fell 5.2 percent.

Housing-related expenditure such as renovations fell 7.7 percent and spending on education, including tuition fees, declined 10.9 percent.

“Consumer spending remains weak,” a government official said. As for the drop in purchases of clothing, the official said average sales per customer for female clothing has been declining in recent months, indicating growing demand for cheaper goods.

“People are cutting back on spending on goods and services that are less than necessary, such as clothing and packaged tours, while coping with increases in prices of fresh foods,” said Keisuke Okamoto, an economist at the Daiwa Institute of Research.

Spending on transportation and communications including car purchases expanded 5.2 percent.

The income of salaried households rose 1.0 percent to ¥432,415 following a drop the previous month, according to the ministry.

In the labor market, the number of unemployed people rose a seasonally adjusted 4.1 percent, or 80,000, to 2.05 million, while the number of workers declined 0.2 percent, or 110,000, to 64.44 million.

The unemployment rate for men was unchanged at 3.2 percent, while that for women increased 0.2 percentage point to 2.9 percent, the ministry said.

Despite the 0.1 percentage point rise in the overall unemployment rate, “the employment situation continues to improve,” another government official said, citing the fact the rate remains at a 21-year-low level.

The number of workers increased in the wholesale and retailing sector and education industry, while it dropped in the construction industry and the medical and welfare sector.

The number of people leaving jobs voluntarily stood at a seasonally adjusted 860,000, up 3.6 percent, or 30,000.

“Considering that the unemployment rate has dropped to around 3 percent, it would be difficult to see the rate decline further” as the economy is nearing full employment, Okamoto said.