Japan’s Household Spending Rises Below Forecasts, Adding Pressure to Fragile Economy
Japan’s household spending climbed 1.8% year-on-year in September, marking a fifth consecutive monthly increase but falling short of the 2.5% gain economists had anticipated. The uptick, driven by entertainment and transportation outlays, offered modest support to an economy that likely contracted last quarter.
Inflation-adjusted expenditure growth slowed as housing and education spending declined. With consumption accounting for over half of Japan’s GDP, the underwhelming figures heighten concerns about third-quarter economic performance. Analysts warn the GDP report due November 17 may show the first contraction in six quarters.
The spending slowdown coincides with weakening exports and a cooling housing market amid regulatory shifts. While consumer resilience has cushioned inflationary pressures, the recovery remains fragile—raising questions about the Bank of Japan’s policy trajectory.
