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Household spending in Japan fell for the second straight month, down by 0.3% in October from a year ago and way below the 1.4% rise economists had predicted.
A rise in vegetable prices due to bad weather for October led consumers to spend lesser, data from the Ministry of Internal Affairs and Communications showed. Fresh vegetable prices rose by more than 20% in October compared to a year ago as the bad weather reduced crop takings.
However compared to the previous month, household spending eased as September's results fell by 1.6% due to natural disasters: Osaka was hit by a powerful typhoon while a main island in Hokkaido experienced an earthquake.
Household spending for October was down in segments such as housing, food, fuel, and clothing but was up for categories such as furniture, transportation, and medical care.
Household spending in Japan is a key contributor to the private consumption cluster which accounts for more than half of Japan’s Gross Domestic Product.
Expenditures on households have been slow to improve due to the stagnant wage environment in the country as firms are reluctant to raise salaries.
Separate data showed real wages slipping for a third consecutive month in October. Inflated prices of goods will seem more expensive when salaries do not rise in tandem.
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