Japan’s household spending drops for first time in three months
Japan’s households cut back on spending as inflation remained elevated, in a sign of vulnerability in a key pocket of the economy before sweeping U.S. tariffs hit the country.Household outlays, adjusted for inflation, declined 0.5% in February from a year earlier, the internal affairs ministry reported Friday. The result compared with the median economist estimate of a 0.8% decline. The drop was led by falling outlays on clothes and footwear, housing and food.Consumer spending, accounting for more than a half of the economy, is a key component of gross domestic product that is monitored closely by Bank of Japan Gov. Kazuo Ueda as he mulls the bank’s policy path. Inflation has stayed at or above the BOJ’s price target for almost three years, sapping spending power, and the latest tariffs from the United States are now expected to weaken the economy further.
