• Kyodo

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Household spending fell 3.9 percent in January from the previous year as warm weather dented sales of winter equipment and goods, government data showed Friday.

The monthly drop was the fourth in a row.

Spending by households with two or more people totaled ¥287,173 in real terms, the Ministry of Internal Affairs and Communications said. The sales tax hike to 10 percent from 8 percent on Oct. 1 also continued to weigh on consumption, a ministry official said.

The decline was smaller than the 4.8 percent fall in December and the 5.1 percent drop in October, but its pace worsened from 2.0 percent in November.

The official said the impact of the coronavirus outbreak was “not clearly seen” in the reporting month but will likely be reflected in data for the coming months.

Spending on dining and leisure, among other sectors, is taking a hit from the spreading virus as people stay home to avoid exposure. At the same time, purchases of daily commodities, sparked by panic-buying, are on the rise, making it difficult to foresee how overall consumption is being affected, the official added.

Outlays on transportation and communication dropped 7.9 percent, and those on education and recreation sagged 6.1 percent.

Health care expenditures, the only category showing an increase in the month, rose 3.1 percent, partly due to increased purchases of sanitizer and masks.

After adjusting for inflation, the average monthly income of salaried households with at least two people was up 2.1 percent from a year earlier to ¥484,697.

Household spending is a key indicator of private consumption, which accounts for more than half of the nation’s gross domestic product.

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