Japan's household spending rose 1.8% in September from a year earlier, adjusted for inflation, marking a fifth consecutive month of gains. Led by transportation and entertainment, the figure missed economists' median estimate of 2.5%. The data provides some support for an economy forecast to have contracted in the third quarter.
Outlays by households adjusted for inflation gained 1.8% in September from a year earlier, led by transportation and entertainment, the internal affairs ministry reported Friday. The result missed the median economist estimate of a 2.5% rise, with falling spending on housing and education dragging on overall figures.
Consumption accounts for more than half of Japan’s gross domestic product. While spending held up despite the hit from inflation, a GDP report on Nov. 17 is forecast to show the economy has contracted in the three months through September, ending a five-quarter period of expansion. Exports have fallen while housing starts dropped due to regulatory changes.
This fifth month of rising spending offers some support amid analysts' views of third-quarter contraction, though the shortfall from expectations raises concerns. As a key economic indicator, household consumption trends will influence future policy decisions.