— April Expenditures Nearly Flat M/M Amid State of Emergency
— Japan Govt: Need Close Watch As Pandemic Affects Some Spending
By Max Sato
(MaceNews) – Japan’s household spending jumped from a year earlier in April, largely in reaction to the pandemic-caused slump seen a year earlier, data released Friday by the Ministry of Internal Affairs and Communications showed.
But April spending was nearly flat from March as people were advised to avoid non-essential traveling and shopping, although some grew tired of restricted lifestyles and gathered outside or lined up to enter restaurants and bars that defied the official request to limit business operations.
In April, the government resumed its call for stricter social-distancing and stay-home practices in major commercial hubs, being forced to declare a “state of emergency” again for Tokyo and other prefectures, only a month after it had lifted such measures for Tokyo and its neighbouring jurisdictions. The latest action prompted prefectural governors to ask shops, restaurants, bars and event venues to close during the emergency period.
Following a fall in the January-March quarter, household spending on traveling and eating out in April-June appears to remain sluggish as the state of emergency for various regions has been extended until the end of June.
The key points from the monthly Family Income and Expenditure Survey on
Households:
* Real average spending by households with two or more people surged a record 13.0% on year in April after rebounding 6.2% in March and diving 6.6% in February. The key indicator of consumption came in much stronger than the median economist forecast of an 8.8% rise. The rate of increase was the fastest under the current statistical formula dating to January 2001.
* The increase was led by higher spending on hairdressing, eating out (sushi), automobiles, gasoline (higher energy prices), accommodations and domestic traveling, compared to a year earlier, when many people took the risk of exposure to the coronavirus more seriously than in recent months. On the other hand, expenditures on meats and grains (rice, pasta) fell from year-earlier levels, when many households cooked at home more often during the first wave of the pandemic. Households paid less on electricity bills due in April, which reflected lower usage during mild weather in March.
* “Household spending in nominal amount has recovered to the levels seen two years ago but the new coronavirus is still affecting spending on some items, such as long-distance air traveling and drinking at bars,” a ministry official said. “We need to continue monitoring the situation closely.”
* On the month, real average household spending was nearly flat in April, up a seasonally adjusted 0.1% after +7.2% in March, +2.4% in February and -7.3% in January.
* The government issued a state of emergency in January and extended it for some regions into March after suspending its controversial pro-tourism program to subsidize hotel stays and transportation, which prompted people to avoid eating out and traveling. Restrictions on economic activity to stop the spread of the pandemic were eased in March, triggering a resurgence of coronavirus infections.
* The average real income of households with salaried workers rebounded 2.8% on year in April, marking the first y/y rise in two months after falling 1.0% in March and edging up 0.1% in February. The main bread-earner’s income in the average household posted the first y/y gain in 11 months, mostly due to the base effect. In April, the average spouse income rose a real 7.7% on year, the first increase in three months.