Japan’s household spending unexpectedly fell in May, raising the likelihood that consumption won’t be a key driver for the economy in the second quarter, and complicating the prospects for the central bank’s next interest rate hike.
Real outlays, adjusted for inflation, declined 1.8% from a year ago, the internal affairs ministry reported Friday. The result missed the consensus forecast of a 0.3% increase. Spending slipped 0.3% from April.
Components that drove the decline included outlays for food, which fell 3.1% year on year, utilities and household durable goods. Spending on education and cars increased.