Japan Household Spending Slumps in October, Clouding BOJ December Rate Plans
The surprise drop challenges the view that wage gains are fueling a durable pickup in consumption.
Overview
- Government data show household spending fell 3.0% from a year earlier in October, the first annual decline in six months.
- Outlays dropped 3.5% from September, marking the steepest monthly fall in nearly two years and defying forecasts for an increase.
- Economists had expected a 1.0% year-on-year rise, highlighting the scale of the miss versus market expectations.
- Officials said weakness was concentrated in food, leisure and auto-related categories, while noting it is too soon to declare consumption stalled.
- The figures land as the Bank of Japan weighs a December 19 rate hike, with analysts warning soft demand could curb the pace of further tightening.