• Kyodo

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Japan's household spending in May jumped 11.6% from a year earlier, following a sharp increase the previous month, as it continued to rebound from a slump last year caused by the coronavirus pandemic, government data showed Tuesday.

Average spending by households with two or more people in real terms stood at ¥281,063 ($2,500), the Internal Affairs and Communications Ministry said. The year-on-year gain was the second-largest since comparable data became available in January 2001, following a 13.0% spike in April.

Spending expanded for the third month in a row, starting with a 6.2% rise in March.

In May 2020, household spending plunged a record 16.2% due to the government's first state of emergency over the pandemic, declared the previous month for Tokyo and six other prefectures and later expanded nationwide.

Requesting people to stay at home and nonessential businesses to suspend operations, the measure dealt a heavy blow to consumption until it was fully lifted in late May last year.

On a seasonally adjusted month-to-month basis, however, spending in the reporting month fell 2.1% from April for the first decline in four months.

A ministry official told reporters the nation's third virus emergency, effective from late April through mid-June for Tokyo, is believed to have weighed on private consumption.

In addition, when compared with a pre-pandemic level of May 2019, the latest average spending figure dropped a real 6.5%, the official said, expressing the view that the pandemic continues to affect consumption.

By component, outlays on transportation and communication surged 23.5% from a year ago, the biggest contributor to the overall outcome, supported by brisk purchases of cars and mobile phones. Spending on culture and recreation soared 24.0% as more people took trips and went to entertainment facilities than last year.

Expenditure on housing rose 28.9% and that on clothing and shoes increased 13.0%, also in reaction to the previous year's plummets.

Meanwhile, utility costs dipped 2.4% due to the previous year's high temperatures that increased power demand, the official said. Spending on furniture and household items, which include sanitizers and wet wipes, shrank 2.6%.

The average monthly income of salaried households with at least two people in May was down a real 2.6% from a year ago to ¥489,019, following a 2.8% rise the previous month.

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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