Japan posts weaker private consumption in July
Japan recorded a less-than-expected expansion in household expenditure in July. The decline was owed mainly to a new surge in COVID-19 infections that disrupted consumer activity, casting doubts on the country’s economic recovery.
Household spending climbed 0.7% year-on-year in July following a revised 4.3% drop in June, based on the government data released on Tuesday. The reading missed economists’ median market forecast of a 2.9% growth.
The slight increase in July was partly attributed to a 7.6% contraction in household spending in the same month last year.
Private consumption dropped 0.9% on a month-on-month basis, pointing to a three-consecutive-month decline. It also failed to meet an expected 1.1% growth.
Spending on food, leisure, and transportation climbed year-on-year, while spending on consumer electronics, utility payments, and face masks shrank.
Senior economist Takumi Tsunoda of Shinkin Central Bank Research Institute said lingering infections may have worsened private consumption in August.