TOKYO- Japan’s household spending rose for a second consecutive month year-on-year in February, helped by a flattering comparison with last year’s sharp pandemic-induced slump but the consumer sector is now facing growing headwinds from soaring prices.
Households cut spending from the previous month as pandemic curbs, rapid food and fuel price rises and the coronavirus kept wallets shut, casting a shadow over the world’s third-largest economy.
In a sign of trouble for consumer sentiment, real wage growth stagnated in February as global inflationary pressures weighed on household purchasing power.
“Prices will outpace wage gains from now on, so consumption will be on a sluggish trend,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“While service spending is expected to pick up from April onwards, the likelihood is big that higher prices will weigh on other areas of consumption,” Minami said, adding that spending was likely to pick up nonetheless.
Household spending increased 1.1 percent in February from a year earlier, government data showed, much weaker than the market forecast of a 2.7 percent gain in a Reuters poll.
