Japan’s consumption remains sluggish, but the momentum of wage increases is increasing.
2025-03-21
■ This shows that consumption is still weak and rising prices pressure personal consumption.
■ It reflects the wage growth trend, which helps ease the pressure of high prices and boost consumer confidence.
The real GDP growth rate from October to December last year (the second flash report, 2.2% year-on-year) was revised down compared with the first flash report due to the downward adjustment of private inventory and personal consumption, but it still maintained steady growth.
The household survey in January showed that the real consumption expenditure of the whole family (down 4.5% month-on-month) dropped sharply in January after three consecutive months of growth. The Real Consumption Trend Index (CTI) of the whole family in January (down 1.9% month-on-month) also showed a downward trend. From the perspective of the ten major consumer categories of the CTI of the whole family, food prices continued to fall, and personal consumption remained sluggish due to the pressure of rising prices.
The economic observation survey in February showed that the current situation judgment DI (45.6, down 3.0 percentage points month-on-month) fell sharply. Although the employment-related DI rose due to the increase in recruitment demand, the household trend-related DI fell sharply. In February, the economy was dragged down by special factors such as heavy snow in some areas, but high prices remain the main pressure. According to the first statistical results of the 2025 Spring Labor-Management Negotiations (Shunto) released by the Japan Trade Union Confederation (Rengo), the weighted average wage increase rate was 5.46%, an increase from the same period last year, reaching the highest level since 1991, showing that the momentum of wage growth is strengthening.
■ It reflects the wage growth trend, which helps ease the pressure of high prices and boost consumer confidence.
The real GDP growth rate from October to December last year (the second flash report, 2.2% year-on-year) was revised down compared with the first flash report due to the downward adjustment of private inventory and personal consumption, but it still maintained steady growth.
The household survey in January showed that the real consumption expenditure of the whole family (down 4.5% month-on-month) dropped sharply in January after three consecutive months of growth. The Real Consumption Trend Index (CTI) of the whole family in January (down 1.9% month-on-month) also showed a downward trend. From the perspective of the ten major consumer categories of the CTI of the whole family, food prices continued to fall, and personal consumption remained sluggish due to the pressure of rising prices.
The economic observation survey in February showed that the current situation judgment DI (45.6, down 3.0 percentage points month-on-month) fell sharply. Although the employment-related DI rose due to the increase in recruitment demand, the household trend-related DI fell sharply. In February, the economy was dragged down by special factors such as heavy snow in some areas, but high prices remain the main pressure. According to the first statistical results of the 2025 Spring Labor-Management Negotiations (Shunto) released by the Japan Trade Union Confederation (Rengo), the weighted average wage increase rate was 5.46%, an increase from the same period last year, reaching the highest level since 1991, showing that the momentum of wage growth is strengthening.