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Japan Household Spending Drops For Eighth Month in July

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Japan Household Spending Drops For Eighth Month in July

Japanese household spending fell for the eighth straight month in July, dragged down by sharp pullbacks in housing, utilities and transportation expenses as rising inflation weighed on consumer purchasing power.

Real consumption for households with two or more persons fell 3.6% year over year to 301,245 yen, according to government data released Friday. The drop was sharper than June's 3.3% decline and worse than the 1.6% drop projected by analysts, according to Investing.com.

Housing consumption led the sector declines, sliding 16.4% in real terms to 17,291 yen. Spending on fuel, light, water, and transportation also contracted during the month, although spending on culture and recreation increased by 4.8% to 32,700 yen.

The persistent weakness in consumer spending coincided with declining household incomes. Average monthly income per household fell 3.8% year over year to 689,476 yen in July. Disposable income slid 3.1% to 554,381 yen during the month.

The decline in household incomes and outlays comes as headline inflation surged to the highest level this year at 1.9% in July.

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