Elderly households increased spending in 2009, bucking the trend among younger generations who were forced to pare purchases to cope with record unemployment and tumbling wages.
Monthly average outlays of households headed by a worker of at least 60 years old increased 1.2 percent to ¥303,593 from a year earlier, according to figures released by the internal affairs ministry. All of the five other age groups reduced purchases.
With one in five Japanese over the age of 65, pensioners are becoming a growing force in consumer spending. Their outlays won’t be enough to sustain the recovery, though, because most people are still tightening their purse strings, economist Junko Nishioka said.
“The key swing group to boost consumer spending is the young,” said Nishioka, chief economist at RBS Securities Japan Ltd. “So consumer spending will not gain momentum until their wages improve.”
Average monthly wages slid by a record amount last year to ¥315,164, the lowest since the government started tracking the data in 1990. The jobless rate surged to a postwar high of 5.7 percent in July.
Some 22 percent of the population was older than 65 in 2008, government data show. Along with the declining birthrate, the aging population will result in fewer workers and taxpayers, making it harder for the government to bolster growth in the long term.
Prime Minister Yukio Hatoyama plans to introduce measures that redistribute wealth to stimulate spending among younger people. One of his plans is to expand the limit for gift tax exemptions to ¥15 million from ¥5 million this year for people buying a residence. The policy won’t be enough to spur domestic demand, Keisuke Naito, a senior economist at Mizuho Research Institute, wrote in a report this week.
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