Japan household spending rises in June on strong travel, TV demand

Among 10 categories, outlays on leisure contributed the most to the overall increase as many customers paid for upcoming August package tours, with more people than usual expected to travel in the middle of the month due to a three-day holiday, the data showed.

It's MORE than a "three day" holiday! The "holiday" "Mountain Day" was put on August 12th purely because it precedes the annual "O'Bon" season here, August 13th to August 15th, where people traditionally go back to their homes and pay their respects to their dead ancestors.

Mountain Day was created to give this extra day, and like all the other holidays that were moved to being observed on Monday's, to give a boost to the economy as well!

It just happens that this year it falls on a Monday, thus giving many people an extra long break. Many are taking off from this Friday August 9th all the way to August 18th.

Hence the increase in travel arrangements/plans.

Oh, so consumer spending increases a few months before the sales tax increase. Who would have predicted such a thing? Um, everybody!

The ministry maintained its assessment, saying household spending is "picking up.

What else are "they" going to say? Nearly every summer there is an increase in consumer spending, it is directly related to the summer bonuses that many people get, but there are fewer now getting them than ever before as well. The increase is also due to the upcoming increase in the consumption tax too!

Watch what "they" say in the months following the increase. It will be like, "Well we expected this as people stopped spending!" Yet there is typically a decrease in spending after the summer anyway! Combine that with a tax increase and we may be looking at a serious downturn to the economy here!

consumers bought high-definition 4K TVs as their prices began to decline

This makes sense. 3 years ago when I came to Japan I couldn’t believe the prices of 4K TV. My 4K TV with internet features and more that was 65” cost me a little over ¥200,000. In Japan, smaller and not as equipped TV were well over ¥400,000. These days, the prices have dropped considerably.

Love all the JT "experts" scrambling to twist good economic news about Japan into something negative! Spending has been picking up for 7 straight months. Good news for retailers, consumers and employment.

the average monthly income of salaried households with at least two people was up 3.5 percent

Great! Just in time for a 3% tax increase! Thanks for killing the momentum Abe!

Quickly everyone, before the taxhike. End of this year is going to be gloomy after the taxhike.

I had no idea TVs were so important to the economy?

Or perhaps government statistics should not be believed, they do have a history of being cherry picked and presented as good news for the regiem.

If you go back to past “news” regarding rises in consumer spending, none of them were sustainable. Either a long weekend or holiday, an upcoming tax hike, or a product / service being phased out. What’s more amazing is that this is camouflaged as real news, which begs the question if they are belittling our intelligence or if people actually truly believe in this.

Constant consumption. More, more, more... We humans are sort of ridiculous. So, I get it. This is good news for the economic system we feed and let's all be happy that people bought more crap!

Sorry but what I took away from this article is that 'nothing' is changing and maybe this is not so good for improving the likelihood that the earth will continue to sustain our existence. Hmmm... I guess that's a different issue? New TV's vs conscious decisions about creating pollution. Yep, TV's won again.

I'm with Cricky.  Buying TV's is a big thing for economic data?  Seems weird.

Average monthly income ¥880,805? Huh?

880805 × 12 =

¥10,569,660 per year? Isn't it about half of this number? My income was about this but I am paid well.

I think some numbers are wrong here. Can anyone correct me please and let me know.

After adjustment for inflation, the average monthly income of salaried households with at least two people was up 3.5 percent from a year earlier to 880,805 yen

I also see the number of average income very indicative of the disparity in the wealth.

shonanbb, I guess statistically the numbers are right but it is disturbing how most people struggle, live in small houses and apartments , etc., etc. 3.5% up in spending is not representative for the social balance.

Oh, so consumer spending increases a few months before the sales tax increase. Who would have predicted such a thing? Um, everybody!

Everyone except the person who wrote this article!

Love all the JT "experts" scrambling to twist good economic news about Japan into something negative! Spending has been picking up for 7 straight months. Good news for retailers, consumers and employment.

"Twist"? Hardly, pragmatic, and not blinded by misleading statistics made to make things look brighter than reality.

https://asia.nikkei.com/Economy/Japan-s-real-wages-drop-for-6th-straight-month-in-June

Japan's real wages drop for 6th straight month in June

Meaning that the consumption gains are NOT sustainable.

@kaerimashita @cricky

TV is considered a luxury good. Luxury goods help indicate the impact of current interest rates and how much is spent on luxury goods is usually an indicator as to whether or not it’s okay to raise interest rates. Although Japanese typically use cash, in other countries Luxury goods are typically made with credit cards. This helps with seeing how well the economy is going by what consumers utilize their credit utilization.

In Japan, consumer spending is always up around this time. That data is meaningless. People take vacations and received their bonuses. Consumer spending is always higher around now and in the end of the year.

Spending has been picking up for 7 straight months. Good news for retailers, consumers and employment.

yep and well expect your comment after the consumption tax hike in October

Who buys a TV ?

It is not like smartphones or computers were better...

It means more oldies. Gloomy.

Nonsense article. The following statement is the dumbest of all: "After adjustment for inflation, the average monthly income of salaried households with at least two people was up 3.5 percent from a year earlier to 880,805 yen, following a 0.2 point fall the previous month." You are talking about the top 5-10% of Japan, not the common person.

"After adjustment for inflation, the average monthly income of salaried households with at least two people was up 3.5 percent from a year earlier to 880,805 yen, following a 0.2 point fall the previous month." 

Shonanbb, Sam Watters, I think what this is supposed to mean is that if a household has two people working full-time, both pulling in an average 440K JPY, the total income for the household works out at about 10.5 M.

Although it's badly written, I don't think the article is suggesting 10.5 M is the average salary for your Taro on the street.

Don't believe a TV is a luxury good. Every home has one, almost every shop. Sad state of affairs if a TV is classed as a luxury.

@Cricky

When I were a lad, shoes were a luxury. And soap. And toothpaste...,

After adjustment for inflation, the average monthly income of salaried households with at least two people was up 3.5 percent from a year earlier to 880,805 yen, following a 0.2 point fall the previous month.

I googled the Japanese and the announcement was that this is for a "sarariman setai". It will be something like seishain at listed companies (and possibly local governments) who live in regional capitals. That is the definition of "sarariman setai" given in the link below in Japanese, along with net income numbers. Whatever it is exactly, the definition will apply to so few people that the quoted number is meaningless. Choosing to use this number with no context is likely to upset millions of people. No wonder people hate the government.

http://grading.jpn.org/SRL01201.html

Note that 70% of men and women in Japan also earn less than the normally calculated average wage. You are in fine company if you are below it.

@DerekGrebe. You make a fair point and I can only speak with expertise about the Tomakomai/Iburi (Hokkaido) area. Having said that, no one couple outside of politicians or A-list companies in this neck of the woods makes anywhere near that kind of salary.

@Cricky

Luxury good doesn’t mean it’s luxurious. Luxury goods tend to represent a person’s income. Meaning the more higher end items purchased tends to mean more people are making more money. Lower end TV purchases or not purchasing a TV tends to mean your income is not stretching as far.

Luxury goods are related to a person’s income. Cell phones are also luxury goods. One great example in Japan is when a person purchases a smart phone over a flip phone. Also, purchasing a 4K TV over a regular or HD TV.

If everyone has one or two it's not a luxury. 40 years ago TV was a luxury. 60 years ago a fridge. I don't have a phone, makes life difficult trying to explain why when filling out forms. Everyone else has one I choose not to. They are a necessity for modern life not a luxury.

Spending is up because... we're buying things before October's Tax increase. From November, spending will nose dive.

Bonuses went up a bit this year, which explains the increase for June. Monthly pay is still drifting downwards, as we will see when next month's figures come out.

It's going to get a whole lot worse after October.

I remember when the Tax rate was 3%.. now it's going to 10%.. the Economy has between those two periods dropped.... sadly the Idiots in Charge are clueless Cut the SDF by 50% for starters... would be a good idea.