Households have cut consumption for a fourth month as inflation continues to weigh on their purchasing power, showing an economic fragility that’s likely to keep the Bank of Japan cautious about additional rate hikes.
Outlays adjusted for inflation fell 0.4% in November from a year earlier, led by household durable goods and clothing, the internal affairs ministry reported Friday. The result was better than expectations for a 0.9% drop, but the gauge has risen only twice in the past 12 months. Nominal spending rose 3% compared to the previous year.
Consumer spending has been on a downtrend for months as shoppers cope with inflation that’s been at or above the BOJ’s price target for more than 30 months. The biggest wage growth in years has yet to change the tide as inflation continues to outpace a boost in paychecks.
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