In July 2025, household spending in Japan experienced a year-over-year increase of 1.4%, building on a previous 1.3% rise in the prior month. This marks the third consecutive month of growth in personal expenditure. However, the growth figures fell short of market expectations, which anticipated a 2.3% increase. This discrepancy can be attributed to persisting high cost pressures and comprehensive U.S. tariffs.
Expenditures saw continued growth in several sectors: medical care surged by 11.5% compared to 8.9% in June; transportation and communication jumped to 14.8% from 8.6%; utilities saw a smaller increase at 4.8% versus 6.3%; furniture and household items rebounded to a 0.8% rise from a previous -5.0%; and education spending increased significantly by 9.5% relative to 3.5% in June.
Conversely, spending continued to decline in certain areas. Food expenditure decreased by 1.8% following a 2.1% drop, clothing and footwear fell by 0.4% compared to a previous 6.6% decline, and culture and recreation saw a reduction of 4.1% down from 1.0%. Housing expenses also saw a notable reduction, shrinking by 5.9%, which contrasts with the 11.6% drop observed in June. On a month-to-month basis, spending increased by 1.7%, rebounding from a 5.2% decline in June, yet still missing the anticipated growth of 1.3%.
