–Many Remain Frugal Amid High Costs of Living, Trimming Gift Money and Switching to More Affordable Mobile Phone Plans
By Max Sato
(MaceNews) – Japan’s real household spending posted an unexpected rebound in November, up a decent 2.9% on year (vs. consensus -1.4%), led mainly by a jump in automobile purchases due to a routine shuffle of household samples, which boosted overall expenditures by 2.77 percentage points, data released Friday by the Ministry of Internal Affairs and Communications showed.
The fact that November this year had 12 days in the weekends and public holidays, up from 10 a year earlier, also lifted spending on refrigerators among other durable goods while cold weather pushed up demand for winter clothing, a ministry official told Mace News. Some households also spent more on wedding dresses and receptions.
The core measure of real average household spending (excluding housing, motor vehicles and remittance), a key indicator used in GDP calculation, climbed at a slower pace of 1.8% on year in November after rising 1.5% the previous month, when overall spending plunged 3.0%, which was the first decline in six months mainly due to a pullback in automobiles.
On the downside, elevated costs of living have kept consumers frugal in recent years. The November data showed many households continued to trim the funds sent to kids studying away from home and the gift money given at weddings and funerals. There is also a widespread move to switch to more affordable mobile communications plans.
The average real income of households with salaried workers slumped 2.2% on year in November after slipping 0.1% in October, being unchanged in September and rebounding 2.8% in August. The average real income of the primary rice earners posted its sixth straight fall, down 3.5%. By contrast, their spouses’ average income rose 2.1% for the fifth consecutive gain.
From a month earlier, real average expenditures by households with two or more people soared 6.2% in November, possibly on winter clothing demand, beating the median economist forecast of a 1.4% rise and well above the forecast range of 0.4% to 3.3% gains. It is the first increase in three months after a 3.5% dip the previous month.