TOKYO (Reuters) – Japanese consumer spending in January fell by the most in 35 months, government data showed on Friday, although an internal affairs ministry official said the number did not necessarily reflect an overall trend of declining consumption.
Household spending in January decreased by 6.3% from a year earlier, down for the 11th straight month, the government data showed.
That was worse than the median market forecast for a 4.3% decline and marked the biggest drop since February 2021.
On a seasonally adjusted, month-on-month basis, spending fell 2.1%, versus an estimated 0.4% increase.
One-off factors such as decreases in new car purchases amid factory suspensions and lower energy bills due to warm weather contributed to the spending drop, the official said.
The bigger-than-expected fall was also against the backdrop of higher spending in the same month last year from post-pandemic travel subsidies, the official said.
Separate data released on Thursday showed Japanese real wages in January shrank for the 22nd month in a row, but at the slowest pace in more than a year on weakening price pressures.
Japan’s economy stumbled into a recession in the October-December quarter last year on weak domestic demand, preliminary estimates showed.
Economists, however, forecast gross domestic product figures to swing to growth in revised readings that will be announced on Monday, thanks to solid capital expenditure.
(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim and Jamie Freed)
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