Japan’s real consumption expenditure for households with two or more people fell 3.1% year-on-year in August, the Statistics Bureau said in its release on 9 October. Average monthly expenditure was ¥310,975, down 1.0% in nominal terms. The distinction between real and nominal spending matters because price changes can mask changes in purchasing power. The data describe August activity, not spending during October.

Japan’s real household spending fell 3.1% year-on-year in August, marking the ninth consecutive monthly decline, although the drop was smaller than expected. Persistent inflationInflationInflation refers to a sustained rise in the general price level that reduces the purchasing power of money. The term belongs in Level 7 because it helps connect macro conditions...Read More continued to weigh on consumers, raising concerns about domestic demand as the Bank of Japan considers further interest-rate increases.