Japan’s household spending declined 3.1% year-on-year in August 2026, a smaller drop than in July and better than market expectations of a 3.6% fall. Despite this improvement, it was the ninth consecutive month of contraction, reflecting continued consumer caution amid persistent inflation. Even so, the decline was the mildest since May.
By category, spending remained weak across most segments. Expenditure on food fell 1.4% (vs -1.3% in July), utilities dropped 5.2% (vs -9.2%), healthcare was down 1.9% (vs -6.0%), clothing plunged 8.7% (vs -0.3%), housing decreased 5.8% (vs -16.4%), and education spending contracted 12.3% (vs -5.4%). Outlays on furniture and household goods slipped 6.3%, reversing a 0.7% increase in July, while spending on culture and recreation fell 4.3%, compared with 4.8% growth previously.
In contrast, transport and communication spending returned to growth, rising 0.2% after an 8.5% decline in July. On a seasonally adjusted month-on-month basis, overall household expenditure inched up 0.1%, marking a second consecutive monthly gain but slowing sharply from July and undershooting forecasts of a 0.5% increase.
