• Kyodo

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Japan’s household spending in April rose a record 13.0% from a year earlier as consumption rebounded from a sharp decline triggered by the initial coronavirus shock last year but remained below pre-pandemic levels, government data showed Friday.

The margin of increase was the largest since comparable data became available in January 2001, with households with two or more people spending an average ¥301,043 in real terms, the Internal Affairs and Communications Ministry said.

The 13% rise was the second straight monthly gain following a 6.2% increase in the previous month.

In April 2020, household spending dropped 11.1% due to the government’s first state of emergency over the virus, initially issued for Tokyo and six other prefectures and later expanded nationwide. Requests that people stay home and closures of nonessential businesses under the emergency declaration cut into consumer spending.

The previous record on a year-on-year basis was a 9.5% leap marked in September 2019 on the back of a last-minute splurge ahead of a consumption tax rate hike to 10% from 8% on Oct. 1 that year.

Meanwhile, the latest average amount of spending fell slightly short of the pre-pandemic level of ¥301,136, posted in April 2019.

“Although the April figure was at a lower level than 2019, it showed that the amount of spending has almost returned to normal,” a ministry official told reporters.

But the official explained that the type of spending is “totally different,” saying outlays on sectors such as eating out and trips are still at quite low levels, although their declines were offset by increases in so-called nest-dweller consumption including foodstuffs for cooking at home and game consoles and software.

Seasonally adjusted spending in the reporting month inched up 0.1% from March for the third straight month of increase.

The second virus emergency was lifted in late March, but the third one was declared in late April amid a fourth wave of infections driven by highly contagious virus variants. The current emergency declaration is scheduled to end on June 20.

By component, expenditures on accommodation grew over sevenfold and those on transportation more than doubled. Outlays for dining out expanded 87.8%, and those for purchasing cars increased 16.8%.

Spending on clothing and shoes soared 84.8%, partly because some schools and companies resumed welcome ceremonies for new students and employees this year, according to the ministry official.

The pandemic forced schools and companies across the country to cancel such ceremonies last year. Japan’s fiscal and academic years start in April.

On the other hand, expenditures on rice decreased 12.6% and those on meat dropped 10.9%. Utility bill payments were also down 6.3%.

The average monthly income of salaried households with at least two people in April rose a real 2.8% from a year ago to ¥543,063, following a 1.0% dip in March.

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

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