“Japanese Household Spending Tumbles”

Originally published by Reuters on July 5, 2018 Read the original article.

That’s the headline from a July 5 Reuters article.

This excerpt from the article provides details:

Japan’s household spending tumbled in May at the fastest pace in almost two years, but real wages rose even more quickly – a possible boost to Japan’s long campaign to change consumers’ deflationary expectations.

Some economists warn this pace of wage growth is not sustainable. Consumer spending is expected to eventually bounce back because of an extremely tight labor market, although probably not by enough to meet the Bank of Japan’s 2 percent inflation target. …

The 3.9 percent annual fall in household spending in May was the largest since August 2016. That missed the median estimate for a 1.5 percent decline from a year ago by a wide margin and follows a 1.3 percent annual decline in the previous month.

Consumer spending accounts for more than half of gross domestic product. The decline in May suggests the chance of achieving the BOJ’s 2 percent inflation target are so distant that it has fallen out of sight for many economists.

Household spending fell in May as consumers spent less on dining out, food, and leisure, Friday’s data showed.

Japan is not the only country where consumers have cut back on spending.

Nearly a week before this Reuters article published, the July Elliott Wave Financial Forecast noted:

Yesterday [June 28], first-quarter U.S. GDP growth was revised down to 2% on the weakest pace of consumer spending in five years, since 2013.

Prepare for what EWI’s analysts see ahead.

Read the free report, “What You Need to Know NOW About Protecting Yourself from Deflation.”

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