TOKYO : Japan’s consumer spending fell for the 13th straight month in March, creating challenges for policymakers who are seeking to drive stronger real wage growth, a prerequisite for additional central bank rate hikes.
Household spending fell 1.2 per cent in March from a year earlier, official data released on Friday showed, against economists’ median forecast for a 2.4 per cent drop and following a 0.5 per cent decline in February.
On a seasonally adjusted, month-on-month basis, spending increased 1.2 per cent, much bigger than an estimated 0.3 per cent contraction and a 1.4 per cent rise in February.
The weak figures came a day after labour ministry data showed real wages shrinking two years in a row, as the rising cost of living outpaced nominal wages despite the biggest pay hikes in about three decades.
Weak household consumption is a source of concern for policymakers who want to see sustained economic growth led by strong wage hikes and solid consumer spending.
Separate data on Friday showed Japan’s current account surplus widened to 3.40 trillion yen ($21.9 billion) in March.
That compared with economists’ median forecast for a surplus of 3.49 trillion yen in a Reuters poll.
For the fiscal year that ended March, Japan’s current account surplus was a record 25.339 trillion yen, reflecting a trade surplus, cooling commodity prices and hefty gains in primary income from direct investment overseas.
(This story has been corrected to show spending increased month-on-month, not fell, in paragraph 3)
