By Max Sato
(MaceNews) – Japan’s household spending in October marked the first year-on-year increase in 13 months as the base-year effects of the October 2019 sales tax hike faded, while a third wave of coronavirus infections around the world is likely to continue restricting some expenditures, data released Tuesday by the Ministry of Internal Affairs and Communications showed.
Last month’s data had already shown that consumer spending recorded a pickup in the July-September quarter from the previous three-month period, contributing to a rebound in the Q3 GDP.
The key points from the monthly Family Income and Expenditure Survey on
Households:
* Real average spending by households with two or more people posted the first year-on-year rise since September 2019, up 1.9% in October, but it was weaker than the median economist forecast of a 2.4% gain. The increase followed a 10.2% drop in September. It was in reaction to the 5.1% slump in October last year, when the consumption tax was raised to the current 10% from 8%.
* The increase in October spending was led by higher purchases of electric appliances (refrigerators and washers), automobile maintenance and parts as well as higher medical costs including those for vaccinations. Many households have adopted a COVID-19 lifestyle of working and cooking more at home, instead of commuting and eating out. Expenditures on holiday tours, commuting and dining out continued falling on year due to restricted activity during the pandemic.
* On the month, real average household spending rose 2.1% in October, marking the third straight m/m rise following +3.8% in September.
* The average real income of households with salaried workers recorded the 10th consecutive year-on-year increase, up 2.5% in October after rising 2.6% in September.
* Industry data released last month showed that domestic department store sales posted the 13th month of year-on-year decline in October in the absence of foreign tourists amid continued COVID restrictions on entries of all nationalities, but the pace of decrease decelerated to -1.7% from -33.6% in September in payback for a sharp drop in October 2019, when the sales tax was raised. Supermarket sales rose 2.8% on year in October after falling 4.6% in the previous month.
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Contact this reporter: max@macenews.com.
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