Japan's spending slump eases as economy reopens, COVID-19 clouds outlook
* June household spending -1.2% yr/yr vs f'cast -7.5%
* Fall is smaller than record plunge in May as lockdown
* Cash payouts boost spending on TVs, air conditioners
* Analysts expect any consumption recovery to be moderate
(Adds analyst quotes, wage data)
By Leika Kihara
TOKYO, Aug 7 (Reuters) - Japan's household spending fell at
a much slower pace in June than in the previous month as the
economy re-opened from lockdown measures to contain the
coronavirus pandemic, offering some hope of a moderate recovery
later this year.
But the recovery was driven largely by the government's
blanket cash payouts to households, which were spent on big
ticket items like television sets, personal computers and sofas.
That cast some doubt on the sustainability of the rebound,
particuarly as rising COVID-19 infections nationwide have forced
the government to request citizens hold off on unnecessary
travel and work from home as much as possible.
"The rebound in consumption was stronger than expected, so
we may see the economy pick up faster than initially thought,"
said Yoshiki Shinke, chief economist at Dai-ichi Life Research
"But renewed rises in infection numbers are worrying. It's
too early to be optimistic on the outlook."
Household spending in June declined 1.2% from a year
earlier, government data showed on Friday, less than a median
market forecast for a 7.5% drop.
It followed a record 16.2% drop in May, when consumers were
still heeding authorities' calls to stay home to contain the
pandemic. Those emergency steps were lifted in late May.
Compared with the previous month, household spending jumped
13.0% in June to mark the biggest increase on record as the
government's cash payouts offset a steady drop in regular wages.
The payouts helped push spending on air conditioners up by
nearly 30% in June, television sets by 83%, and tables and sofas
by two-fold, the data showed.
But inflation-adjusted real wages fell for the fourth
consecutive month in June, clouding the outlook for an economy
bracing for a prolonged impact from the pandemic.
The fallout from the pandemic has pushed Japan deeper into
recession, hitting an economy already reeling from the damage to
consumption and exports from last year's tax hike and slumping
(Reporting by Leika Kihara; additional reporting by Daniel
Leussink; editing by Jane Wardell)
First Published: 2020-08-07 01:31:19
Updated 2020-08-07 03:22:44
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