Japan Household Spending Falls But Wage Growth Reaches 21-Year High
Japan’s real wages rose in June at their fastest pace in more than 21 years thanks to higher summer bonuses, but household spending decreased. According to official data, real wages rose 2.8% yoy in June, accelerating from a 1.3% increase in May and marking the fastest pace of growth since January 1997.
Household spending fell 1.2% in June from a year earlier, marking the fifth straight month of declines. But the fall was smaller than market forecasts of a 1.6% slide and a 3.9% drop in May. Households' inflation-adjusted income rose 4.4% in June, the biggest increase since July 2015.
Japan will release GDP data for Q2 on Friday. Gross domestic product is expected to have expanded at an annualized rate of 1.4% in the second quarter. That would translate to a 0.3% expansion in April-June from the previous quarter. In January-March, the economy shrank at an annualized rate of 0.6%, marking the end to eight straight quarters of growth.
Meanwhile, private consumption, which accounts for about 60% of GDP, likely rose 0.2% for the quarter, rebounding from a 0.1% fall in the first quarter.