Japanese Consumers: Recent Trends In Spending And Income

Japanese household consumption expenditures in the third quarter will not be known until the "First Preliminary Release" of GDP for the third quarter due November 16 is released.  Some indication of what the consumers is doing can be gleaned from recent monthly data from the Family Income and Expenditure Survey and the data on wages and employment.

Results of Japan's Family Income and Expenditure Survey for September were released over the week end.  In nominal terms, the index of living expenditures declined in July to 95.0 (2005 = 100) from 97.0 in June, but rose in August and September to 96.9 and 97.3, respectively.  Nevertheless, for the quarter, living expenditures in nominal terms were 2.4% below the year ago figure.  As a result of continued deflation in the Japanese economy, real living expenditures increased in August and September and for the quarter were up 0.4% from the third quarter of 2008 as can be seen in the first chart. On the whole, the Family Income and Expenditure Surveys for the last three months suggest that real consumer spending may show a small increase in the third quarter.

The outlook for consumer incomes and hence their ability to spend is mixed.  Seasonally unadjusted wages in nominal terms have continued to decline on a year to year basis--5.6% in July, 2.7% in August and 1.59% in September. But again adjusted for deflation, real wages were up 0.9% in September over September, 2008 one of the few year over year increases in real wages that has occurred over the past three years as can be seem in the second Chart.  Employment  increased  and unemployment decreased marginally  in August and September  as can be seen in the third chart.