–Spending Up M/M As People Dine Out, Travel More Freely After Covid Rules Eased
By Max Sato
(MaceNews) – Japan’s real household spending posted the second straight year-on-year drop in April as supply bottlenecks hampered car purchases and people dined out more freely, spending less on groceries compared to a year earlier when a Covid state of emergency was in place, data released Tuesday by the Ministry of Internal Affairs and Communications showed.
At the same time, household expenditures marked the second consecutive month-on-month gain as people spent more at restaurants and bars while traveling without many restrictions, particularly during the Golden Week holidays from late April to early May, after the government ended its strict Covid rules in late March.
In April 2021, 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 neighboring jurisdictions.
The key points from the monthly Family Income and Expenditure Survey on Households:
- Real average spending by households with two or more people fell 1.7% on the year in April, coming in weaker than the median economist forecast of a 0.8% drop. It was the eighth year-on-year decrease in the past 12 months, following a 2.3% slump in March, a 1.1% rise in February and a 6.9% surge in January, which was the first rise in six months.
- The decrease in April was led by lower spending on automobiles and related goods as well as groceries (vegetables and fish). Demand for cooking at home was stronger a year before when economic and social activities were more restricted under the Covid state of emergency. By contrast, expenditures on domestic packaged tours and hotels showed solid gains along with traveling by train and plane while eating and drinking at restaurants and bars also picked up.
- On the month, real average household spending rose a seasonally adjusted 1.0% in April, marking the second straight rise and the fourth increase in the past 12 months, after rising 4.1 % in March, slumping 2.8% in February and falling 1.2% in January. It was softer than the consensus forecast of a 1.2% rise. “Despite rising prices, household spending rose on the month,” a ministry official said. “We will continue monitoring the situation, including the impact of higher prices.”
- The average real income of households with salaried workers plunged 3.5% on year in April after rising 2.3% in March, dipping 0.1% in February and rising 1.6% January. The average income fell at a slower pace of 0.6% in nominal terms. The national average core consumer price index (excluding fresh food) soared 2.1% from a year earlier in April and the total CPI surged 2.5% as the base effects of sharp mobile phone user fee discounts from April 2021 have waned and food and energy costs continued climbing amid protracted supply constraints.
- The main bread-earner’s real income in the average household marked the first year-on year drop in 13 months in April, down a real 2.7% (up a nominal 0.2%), after rising 2.2% in March, while the average spouse income posted the third straight rise, up a real 1.2% (a nominal 4.2%) in April, following a 3.7% gain in March.
Average Wages on Gradual Pickup Trend But Down in Real Terms
The pickup in nominal wages in Japan continued in April while real wages remained weak mid surging costs of daily necessities, data released Tuesday by the Ministry of Health, Labour and Welfare showed.
Total monthly average cash earnings per regular employee in Japan posted the fourth straight year-on-year rise, up a preliminary 1.7% in April after rising a revised 2.0% in March. In real terms, however, average wages fell 1.2% on year after dipping 0.6% in March and being unchanged in February.
Base wages rose 1.1% on year in April, marking the sixth straight gain after rising a revised 1.0% in March. The key indicator for overall wages has been on a modest recovery trend in the past year.
Contact this reporter: max@macenews.com
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