Japanese household consumption rose at the fastest pace since August 2022 at the end of 2024, as strong wage gains led by bonuses helped loosen consumers’ purse strings.
Outlays adjusted for inflation gained 2.7% in December from a year earlier, the internal affairs ministry reported Friday. The result is much better than the median estimate, boosting the three-month moving average to 0.5%, while nominal spending also rose 7% from a year earlier. Outlays were led by housing, which jumped 15.8%, while spending also grew for transportation and communication, as well as medicine.
Friday’s slew of positive spending data raises the question of whether the gains are sustainable, given wage growth in the month was largely supported by the temporary effect of bonuses. Consumer spending, which accounts for more than half of the economy, had struggled to rise in recent months as overall inflation remains high with prices for essential items such as rice surging.
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