Japan's April household spending unexpectedly falls
- Japan's household spending fell 0.1 percent year-on-year in April, according to government data released on Thursday.
- This decline followed persistent inflation near 4 percent that has outpaced nominal wage increases, eroding real purchasing power.
- Though regular pay rose 2.2 percent and total cash earnings grew 2.3 percent in April, inflation-adjusted real wages dropped 1.8 percent.
- In April, households with two or more members averaged expenditures of approximately 325,700 yen, continuing the downward trend in spending on durable goods and clothing.
- The data suggests that rising prices keep limiting consumer spending, which is key as private consumption accounts for over half of Japan’s GDP.
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Japan’s Household Spending Falls as Inflation Stays Elevated
Japan’s household spending unexpectedly declined in April as elevated inflation deterred discretionary spending, in a worrisome sign for policymakers after the economy began contracting even before US tariff measures fully kicked in.
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