Japan's household spending in August falls 3 pct

TOKYO, Oct. 8 (Xinhua) -- Japan's household spending dropped a real 3.0 percent in August year-on-year amid the state of emergency against the COVID-19, government data showed Friday.

According to the Ministry of Internal Affairs and Communications, the average spending by households with two or more people in Japan was 266,638 yen (2,400 U.S. dollars), following a 0.7 percent rise in July.

Seasonally adjusted spending in the reporting period dropped for the fourth straight month, decreasing 3.9 percent from the previous month.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

"In August, coronavirus infections spread throughout the nation at a record-breaking pace, which limited opportunities for many people to go out and led various shops to lose their customers," a ministry official told reporters, adding that heavy rain and low temperatures also suppressed consumption.

According to the official, spending fell 9.5 percent from the same month two years ago, ahead of the COVID-19 pandemic.

Aside from Tokyo and the southern island prefecture of Okinawa, which were under the state of emergency since mid-July and late May respectively, many other areas introduced the emergency measure in August with the spread of the highly contagious Delta variant.

At the end of August, 21 out of Japan's 47 prefectures were under the emergency measure, which requested establishments serving alcohol or offering karaoke services to suspend their business and those not serving liquor to close at 8:00 p.m. local time. The measure, which dampened consumer spending, was fully lifted at the end of September.

By category, transportation and telecommunication expenses dropped 3.4 percent, culture and recreation expenses declined 3.9 percent, and food cost fell 3.2 percent year-on-year as spending on eating out sank 13.4 percent under the emergency.

In addition, outlays on accommodation plunged 34.4 percent because the "Go To Travel" subsidy program, which was launched to boost domestic tourism, lifted the spending in the same period last year. The program was suspended across Japan in December with the spread of COVID-19.

After declining consecutively for three months, the average monthly income of salaried households with at least two people in August rose a real 5.4 percent.