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--Japan Apr Household Spending -1.3% Y/Y;MNI Median +0.9%
--Japan Apr Household Spending Posts 3rd Straight Y/Y Drop
--Japan Apr S/A Household Spending -1.6% M/M; Mar -0.1%
--Japan Apr S/A Household Spending Posts 3rd Straight M/M Drop
--Japan Apr Per-Household Spending Trend -0.8% Y/Y; Mar -1.6%
--Japan Apr Total Household Spending Trend +0.4% Y/Y; Mar +0.4%
TOKYO (MNI) - Japan's real average spending by households with two or more
people posted the third straight year-on-year drop in April, down 1.3%, as
expenditures on gift money and domestic packaged tours continued to decline,
data released Tuesday by the Ministry of Internal Affairs and Communications
Japan's economy had a slow start to the April-June quarter, judging from
April industrial production and household spending data, after it posted the
first contraction in about two years in the first quarter as the severe winter
weather dampened consumption. Economists expect a GDP rebound in Q2.
The ministry downgraded its assessment on household spending for the first
time in two months, saying, "Weakness is seen in consumption." Last month, it
said the pickup was stalling. The pickup continued for nearly a year since May
"We downgraded our view because spending fell in both nominal and real
terms," a ministry official said.
Household spending fell a nominal 0.5% in April, the first year-on-year
fall in 12 months after rising 0.6% in March.
The key points from the monthly Family Income and Expenditure Survey on
* Real average household spending fell 1.3% on year in April after
adjustment for the gap caused by using two different survey methods, the third
straight drop after -0.7% in March. It came in much weaker than the MNI median
economist forecast for a 0.9% rise.
* The decrease was caused by the recent social and demographic changes. In
light of slow real wage growth and lower public pension payouts, spending on
gift money has been reduced. Many consumers are also booking their own hotels
and transportation, bypassing travel agencies. In April, spending on packaged
tours fell 10.1% on year while that on accommodations rose 17.3%
* Some gains in April were not high enough to push up overall expenditures.
Payments of university entrance fees rose as they were more concentrated in
April this year. Monthly payments of mobile communications also rose because
some carriers charged March bills in April as March 31 fell on a Saturday.
* Average real spending also posted the third straight month-on-month drop
in April on a seasonally adjusted basis. The pace of decrease accelerated to
-1.6% from -0.1% in March.
* The core spending index, which excludes housing, motor vehicles and other
volatile items (close to private consumption patterns in GDP data) fell a
seasonally adjusted 0.7% on month in April, the third straight m/m drop after
-1.2% in March.
* The average real income of households with salaried workers fell 0.2% on
year in April after adjustment for the statistical gap, marking the fourth
straight y/y drop after -3.8% in March. Overtime working hours have been falling
as firms and employees are seeking a better work-life balance. Non-regular jobs
for people aged 60 years or older are also increasing, reducing the
* The Household Consumption Trend Index, indicating per-household spending
patterns, fell a real 0.8% on year in April vs. -1.6% in March, while the Total
Consumption Trend Index, which is designed to show similar consumption patterns
in the total domestic output, rose a real 0.4% on year vs. +0.4% in the previous
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: email@example.com