Japanese Household Spending Disappoints

Household spending printed flat from in the year to February, undershooting expectations of a 2.4% expansion. Tellingly, unemployment rose to 3.9% and the number of jobs on offer per applicant declined. Japanese firms have slowed hiring as rising input prices and the buoyant yen have squeezed profit margins. Reduced employment means less money in the pockets of would-be consumers, reducing consumption and spending levels. While Japan has a penchant to rely on the exports to prop up the economy and counter-balance the frugal consumer sector, a decline in hiring will surely impact output levels for goods destined for foreign consumption as well. Should export levels decline, the Japanese economy will find itself with little other means to propel forward.

DailyFX

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