Japan's household spending fell 3.6% year-on-year in July 2026, a deeper decline than the 3.3% drop in June and well below market expectations for a 1.6% decrease. This marked the eighth consecutive month of contraction and the steepest fall since January 2024, highlighting continued weakness in consumer demand.
Spending decreased further on food (-1.3% vs -2.5% in June), utilities (-9.2% vs -7.1%), and transport and communication (-8.5% vs -5.7%). The decline in clothing, however, narrowed significantly (-0.3% vs -19.9%). Outlays also deteriorated for healthcare (-6.0% vs +1.4%), education (-5.4% vs +20.6%), and housing (-16.4% vs +3.6%).
By contrast, spending on furniture and household goods returned to growth (0.7% vs -11.4%), while expenditure on culture and recreation accelerated (4.8% vs 0.4%).
On a seasonally adjusted month-on-month basis, household spending rose 0.5%, rebounding from a 6.4% drop in June but still falling short of forecasts for a 2.6% increase.
