JAPAN TODAY



 

Japan's household spending in July rose a real 0.1 percent from a year earlier for the first increase in three months, as higher wages drove outlays on home renovations and entertainment, government data shows.

But the relatively modest increase indicates households have had to curb spending on food and utilities amid the inflationary environment.

Average spending by households with two or more people stood at 290,931 yen, the Ministry of Internal Affairs and Communications said.

Overall spending was lifted by a 17.3 percent increase in housing outlays, as more people did home renovations such as installing new kitchens and bathtubs, the ministry said.

Outlays on entertainment rose 5.6 percent as more households bought televisions to watch the Paris Olympics, a ministry official said. Expenditures on domestic package tours surged 47.0 percent while those for overseas package tours jumped 62.6 percent.

The average monthly income of salaried households with at least two people climbed 5.5 percent in real terms to 694,483 yen in July, rising for the third straight month, following increases of 3.1 percent and 3.0 percent in June and May, respectively, the ministry said.

Meanwhile, expenditures on food, which account for around 30 percent of spending, fell 1.7 percent, as people spent less on meat and vegetables, with more households reducing their purchases of beef and pork to buy chicken, which is cheaper, the official said.

Spending on electricity and gas decreased 4.6 percent as people cut back on their usage after government subsidies were temporarily discontinued.

While overall personal consumption is recovering, households are becoming more selective in their spending amid rising prices, the official said.

"Spending has not increased as much as wages grew. Some households may be saving part of their increased income," the official said, adding that the ministry will continue to watch closely how the rising wages affect consumption.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.