Japan’s Households Boost Spending Despite Inflation Hit

Japan’s household spending rose for a fifth consecutive month, offering some support for an economy that analysts say contracted in the third quarter, though the results came in below expectations, Yoshiaki Nohara reported for Bloomberg News.

Consumption remains a key indicator of whether households are becoming more resilient against the rising cost of living.

Household outlays adjusted for inflation gained 1.8% in September from a year earlier, led by transportation and entertainment, the Ministry of Internal Affairs and Communications reported.

The result missed the median economist estimate of a 2.5% rise, with declining spending on housing and education weighing on overall figures.

Consumption accounts for more than half of Japan’s gross domestic product (GDP). While spending has held up despite the hit from inflation, a GDP report due Nov. 17 is expected to show that the economy contracted in the three months through September, ending a five-quarter stretch of expansion.

Exports have fallen, and housing starts dropped due to regulatory changes.

Consumption remains a key indicator of whether households are becoming more resilient against the rising cost of living.