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Household Spending Back In Positive Y/Y Territory

JAPAN DATA
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Japan real household spending rose 0.5% y/y in April. This was in line with consensus expectations and against a -1.2% dip in March. This is the first y/y rise in household spending since February last year.

  • The authorities/BoJ will be hoping this is the start of more positive real spending trends. The chart below overlays household spending against real wages growth (the orange light on the chart).
  • Base effects will remain favorable over coming months, with spending troughing in July last year at -5.0%y/y.
  • Nominal spending rose +3.4%, while nominal incomes were +2.3% y/y, but real incomes were -0.6% y/y (versus -0.1% in March). Still, income growth is away from late 2023 lows.
  • By category spending trends were mixed, Education rose 26y/y., while food and transport were negative in y/y terms.

Fig 1: Japan Household Spending & Real Wages Y/Y

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Japan real household spending rose 0.5% y/y in April. This was in line with consensus expectations and against a -1.2% dip in March. This is the first y/y rise in household spending since February last year.

  • The authorities/BoJ will be hoping this is the start of more positive real spending trends. The chart below overlays household spending against real wages growth (the orange light on the chart).
  • Base effects will remain favorable over coming months, with spending troughing in July last year at -5.0%y/y.
  • Nominal spending rose +3.4%, while nominal incomes were +2.3% y/y, but real incomes were -0.6% y/y (versus -0.1% in March). Still, income growth is away from late 2023 lows.
  • By category spending trends were mixed, Education rose 26y/y., while food and transport were negative in y/y terms.

Fig 1: Japan Household Spending & Real Wages Y/Y

Keep reading...Show less