Business / Economy

Household spending continues to tumble

Kyodo

The nation’s household spending fell for the eighth straight month and the jobless rate remained flat in October, posing persistent challenges for the government’s efforts to spur growth momentum in the economy, government data showed Tuesday.

Household spending, a key indicator of private consumption, dropped a seasonally adjusted 0.4 percent in October from a year earlier to ¥281,961 ($2,522), indicating that consumers remain reluctant to spend, according to the Ministry of Internal Affairs and Communications.

The unemployment rate stood at 3.0 percent, unchanged from September. The country’s job availability improved to 1.40 — or 140 positions available for every 100 job seekers — in October, the best level since August 1991, the Ministry of Health, Labor and Welfare said.

Japan’s economy has been growing but only moderately as consumer spending continues to lack strength amid uncertainty over the future course of the domestic economy. Companies have also been reluctant to make bold investments in the face of the yen’s advance, at least until very recently, weighing on their profits.

Spending on food fell 1.0 percent after unfavorable weather led to higher vegetable and other food prices, and housing expenditure dropped 1.6 percent. Spending on furniture and household items rose 2.8 percent.

Car-related expenditures decreased in the reporting month, due in part to the impact of a fuel economy manipulation scandal that emerged earlier this year.

The income of salaried households dipped 0.1 percent to ¥485,827.

“The data showed consumers were worried about the future,” said Toru Suehiro, senior market economist at Mizuho Securities Co.

“Whether wages will increase is an important factor from now,” Suehiro said, although he added it may be difficult for companies to raise them at a time of economic uncertainty.

In the job market, the number of unemployed people dipped below the 2 million mark for the first time in over 21 years, the internal affairs ministry said, as it fell 50,000, or a seasonally adjusted 2.5 percent, to 1.97 million.

A separate internal affairs ministry official said the employment situation remains “on an improving trend.”

The unemployment rate for men fell 0.1 percentage point to 3.2 percent, while that for women was up 0.1 point at 2.7 percent.

On a year-on-year basis, the health care and welfare, finance and insurance and manufacturing sectors added jobs.

The number of workers increased 0.1 percent, or 60,000, to 64.55 million. The number of people leaving jobs voluntarily fell a seasonally adjusted 2.4 percent, or 20,000, to 830,000.

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