Household spending in Japan falls more than expected

Households in Japan, one of Asia’s largest economies, cut spending in July as persistent inflation continued to erode purchasing power. Households in Japan cut spending in July as persistent inflation continued to erode purchasing power. Spending fell 2.7 percent in July from the previous month, the biggest decline since February 2022, as consumers cut back on spending on automobiles and telecommunications, according to data released on Tuesday by Japan’s Ministry of Internal Affairs and Communications. Household spending fell 5.0 percent in July from the same month a year earlier, double analysts’ forecasts. The weak data adds to signs that the economic recovery is struggling to gain momentum at home as inflation continues to outpace wage increases and consumer spending remains below pre-pandemic levels. Core consumer prices rose 3.1 percent in July from a year earlier. Prime Minister Fumio Kishida said he would expand and extend gasoline subsidies beyond previously planned to help households as he plans a new economic measure to be announced this fall. The price of gasoline recently rose to a record high despite the existing subsidies.