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Japanese households spending more; unemployment down


Japan's thrifty households boosted their spending last month while unemployment fell, data showed Tuesday, as the International Monetary Fund (IMF) gave a thumbs up to Tokyo's economic policy blitz.

The 3.7% jump in spending -- the best result in six months -- was far beyond economists' expectations of a 0.5% rise, and comes days after Japan hailed separate consumer price data as showing the government was winning the war on deflation.

The latest spending figures and a stronger labor market are key yardsticks for the success of Prime Minister Shinzo Abe's policy blitz, dubbed "Abenomics," which is squarely aimed at stoking growth in the world's third-largest economy.

The on-month spending jump was likely driven by expectations over a sales tax hike approved earlier this month as consumers looked to buy goods cheaper before the increase.

There are fears that the rate rise, designed to bring down Japan's staggering national debt, could derail Japan's recovery.

But Tokyo has been under heavy pressure to chop a debt mountain that is proportionately the heaviest burden among rich countries at more than twice the size of the economy.

Anoop Singh, director of Asia and Pacific Department at the IMF, on Tuesday repeated calls for Japan to get its finances in order while he described Abe's almost year-old growth plan as "so far, so good".

"The first phase of Abenomics is improving confidence, jump-starting the recovery," he told a news briefing in Tokyo Tuesday, adding that wage hikes were "essential" to exiting deflation.

Abe has pledged to drag Japan out of its 15-year deflationary spiral by stoking price rises through lifting wages and consumption.

While falling prices may sound like a good thing, they encourage consumers to put off spending in the hope they will be cheaper down the road, which hurts producers.

Cautious firms have been reluctant to usher in widespread pay or capital spending hikes after years of lackluster consumer spending weighed on their expansion.

Still, upbeat data from the internal affairs ministry Tuesday showed the average income among working households rose 0.9% in September, while the unemployment rate was down to 4% last month, down 0.1 percentage point from August.

Credit Agricole economist Yoshiro Sato said the latest figures showed Japan's labor market was tight and predicted the jobless rate "would stay comfortably low supporting steady consumption".

© (c) 2013 AFP

©2024 GPlusMedia Inc.

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Seriously doubt these numbers how do they come up with this data? With Tepco raising their prices by 10% and the sale tax looming if anything people would be saving money.

-2 ( +8 / -10 )

But, this is based on consumer spending only, so the results are deceiving. The actual decrease in disposable income for families is much higher and will be up around 15-20% by the end if next year. Unemployment and poverty will boom and I expect there will also be an increase in crime to balance it. The class separation is going to become black and white. The middle class will disappear.

-1 ( +7 / -8 )

Let's see, people are increasing their spending by 3 % while wages have risen by less than 1%.

They're either using credit cards, or dipping into their savings.

NEITHER is a good thing. Unless you're some kind of Keynesian goof who beliefs that credit bubbles are a GOOD thing.

-2 ( +5 / -7 )

I bet it is only people spending before tepco make us pay and the consumer tax rises. It would be more interesting to see this in a year compared to now then we'd see how truely good abenomics is...

As we wave bye bye to the economy crashing from view...

0 ( +3 / -3 )

If the numbers are correct, it's only because everyone is rushing to buy things before next April.

-1 ( +5 / -6 )

It never ceases to amaze me how narrowed minded these economists are when they make their predictions. Of course consumer spending has increased. The major reason for this is because of the looming consumer tax increases starting next year. Many households are buying big ticket items and appliances prior to the consumer tax increase. It would be cheaper to dip into your savings or use the credit card now rather than later. Once the new taxes kick in you will see a big decrease in consumer spending.

0 ( +2 / -2 )

The average income of working households in September also rose 0.9% in real terms

why? was it due to late summer bonus or early winter bonus? I agree with 'gogogo' and doubt these data.

1 ( +4 / -3 )

Of course. Because the cost of living has increased. Need to spend more to acquire the same amount of things.

4 ( +5 / -1 )

This is an average and tells us nothing about who is increasing their spending and on what. As the income gap keeps widening, we can suspect that those at the top will continue to see their incomes rise and engage in conspicuous consumption of high-end luxury goods, which will push up these averages.

As this is for households, it also could reflect that more married women have entered the workforce.

We need to ask what is behind the numbers, which this reporter fails to do as he or she tries to put a positive spin on Abe-nomics.

-2 ( +0 / -2 )

Yes, my household spending went up. Things are more expensive at the supermarket these days!!!

0 ( +1 / -1 )

If the numbers are correct, it's only because everyone is rushing to buy things before next April.

No. These numbers are for September. It was only announced in October that the consumption tax will be increased to 8% from next April.

0 ( +4 / -4 )

We also have to take into account all of the prepared food items that have had their contents reduced without lowering the price. Open a yogurt and check how low the contents are. Package seems over-sized, doesn't it? My favorite chocolate boasted a new package without saying that the portions were smaller as well. I could check the size change because I had the earlier version of the product. Of course the price was unchanged. The shrink-ray will continue, consumers will spend more thinking they are getting the same amount when they aren't.

2 ( +4 / -2 )

C wild. Yes. I have noticed the size of many products being reduced lately yet the price unchanged.

-1 ( +0 / -1 )

People are spending more, and Im seeing a change of mood amoungst Japanese. Now open immigration, and make Japan a great place to live and work.

-1 ( +2 / -3 )

I don't think people are spending because of small sale tax hike. I have lots of near broken electric appliances in my house. My friends laugh at me, but I'll buy new ones only when they become broken or someone wants them.

-1 ( +1 / -2 )

At Japan is doing well. I live in America (in Appalachia) and jobs above minimum wage are non-existant.

1 ( +1 / -0 )

So come April, the Japanese will stop spending on a dime and bring their whole country's economy down? Isn't having a job better than having no job?

0 ( +0 / -0 )

Kickboard, everybody knew the tax hike was coming. Abe was just trying to make it look like he was thinking about it! The bill had already been passed by the former Noda gov't! Tinawatanabe, I don't think 3% is a small tax hike, maybe if you buy all your stuff at the Y100 store, but when you are buying big ticket items, it adds a lot to the final price, thus people are out trying to save as much as they can.

-1 ( +0 / -1 )

If the numbers are correct, it's only because everyone is rushing to buy things before next April.

Except that those statistics are for September. The official announcement was done in October. But even if these consumers predicted a rise, what's the rush?

Here's link to the reports. Of course you can read them right?


What's the biggest category that contributed to the 3.7% increase? What's the second biggest? What do they have in common? Hint: Both categories have very little to do with the pending tax increase.

-1 ( +1 / -2 )

nigelboy Oct. 30, 2013 - 07:37AM JST What's the biggest category that contributed to the 3.7% increase?

Vehicle sales rose 12.4% to 324,315 in September, up from 288,479 a year earlier,

-2 ( +0 / -2 )

Vehicle sales rose 12.4% to 324,315 in September, up from 288,479 a year earlier,

Not even a dent in the 3.7% increase. Please try again.

-3 ( +1 / -4 )


Separately, sales of mini vehicles powered by engines of 660CC or less rose 25% from a year earlier in September to 200,000 vehicles. So you have over 12 percent increase in regular cars, and 25 percent increase in mini vehicles. Not even a dent in the 3.7% increase?

-2 ( +0 / -2 )

Where do people shop at? Our food costs have stayed the same, we shop at Hankyu departments stores and Takashimaya for most things and a few specialist stores for other bits and bobs. No price increases as far as i can notice. Anyway 3% is so insignificant it would only effect those on the poverty line.

-3 ( +0 / -3 )

TEPCO under control, Rice not mislabeled, the food you eat in famous restaurants is high quality, we don't lend money to the mob, there is no danger of radiation for the children in Tohoku, etc, etc. So, with the media being control by you know who, do they really think people will believe this story. How gullible do they think to public is?

0 ( +1 / -1 )

People didn't moan when the Yen was strong and made prices cheaper and now moan about a measly 3% increase in tax, lol!

Some of us had our incomes halved by the strong Yen within a year but carried on without winging and we are the people that Japan needs to get better again. The people that moan and groan and are company slaves will pay more and have less money and the government know that they will just moan and groan about how unfair it is while some work hard and striive for personal success and success for Japan.

-7 ( +0 / -7 )

Wow. I gave a link which outlines the increases of each categories (subcategories) and people still here are "speculating" even pointing out items that doesn't even come close to giving a dent to the 3.7% increase. Simply amazing.

-4 ( +1 / -5 )

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