When we hear that ‘consumer spending has fallen in real terms for 8 consecutive months,’ it seems as if households have all turned toward thriftiness.
However, monthly household statistics are not just numbers that reflect whether or not people refrained from shopping. Months when cars are bought, months when exterior walls are repaired, and months when bonuses are received significantly shift the average amount. I would like to look at the July 2026 Family Income and Expenditure Survey without mixing income and expenditure.
Expenditure for households of two or more people fell below the previous year in both nominal and real terms
According to the Family Income and Expenditure Survey for July 2026 by the Statistics Bureau of the Ministry of Internal Affairs and Communications, consumer spending for households of two or more people was 301,245 yen per month. Compared to the same month last year, it was down 1.5% in nominal terms and down 3.6% in real terms. Real terms is a perspective that removes the effects of price fluctuations and approximates the amount of goods and services that could be purchased. This real decline has continued for 8 consecutive months. (stat.go.jp)
However, this 301,245 yen is the average for all ‘households of two or more people’ and is not a figure for worker households alone. It is a value that combines groups with different average ages of household heads, whether or not they include pension-living households, and employment status. The average household size in July was 2.86 people. (stat.go.jp)
Looking at the breakdown, food was 95,681 yen, an increase of 2.2% in nominal terms, while it was a decrease of 1.3% in real terms. This is a combination where even if prices rise and the payment amount increases, it has not increased when looking at the purchase volume, etc., after price adjustment.
On the other hand, what strongly affected the overall decline was not just the expense items for which the same amount is paid every month. ‘Automobile-related expenses,’ which include automobile purchases, pushed down the real growth rate of consumer spending by 1.00 percentage point, and ‘equipment repair and maintenance,’ which includes construction such as exterior walls and fences, pushed it down by 0.89 percentage points. In other words, it is too early to decide that ‘daily life was cut back’ based on this one month alone. This is because if there are few high-priced, low-frequency purchases, the average will drop significantly. (stat.go.jp)
In worker households, the decrease in income including bonuses is notable
Next, we extract worker households from households of two or more people. Real income was 689,476 yen, down 1.7% in nominal terms and down 3.8% after price adjustment. Disposable income, which is the amount close to take-home pay after subtracting ‘non-consumption expenditures’ such as taxes and social insurance premiums, was 554,381 yen, down 3.1% in real terms. (stat.go.jp)
When dividing the household head’s income, regular income, which corresponds to monthly salary, etc., was 391,463 yen, which was 0.0% compared to the same month last year in real terms, remaining almost flat. In contrast, the household head’s temporary income and bonuses were 139,156 yen, down 11.5% in real terms. Since July is a month when bonuses are easily included in household budgets, the difference from the previous year’s bonus level is likely to significantly move total income. (stat.go.jp)
Consumer spending for worker households was 322,866 yen, down 6.8% in real terms. The decline is larger than the 3.6% real decline for all households of two or more people, but the two are not the same group. The former is limited to worker households, while the latter is households of two or more people including non-worker households. It is not possible to simply compare them like an economic judgment, saying ‘worker spending is 3.2 points worse than all households of two or more people.’
The ‘amount not spent’ does not necessarily mean peace of mind
Subtracting consumer spending of 322,866 yen from disposable income of 554,381 yen, which is close to take-home pay, the difference is 231,515 yen. This is a difference that includes parts that can go to savings, etc., in the Family Income and Expenditure Survey, and does not indicate that the entire amount became bank deposits. Even so, the average propensity to consume, which is the ratio of consumer spending to disposable income, was 58.2%, down 2.3 points from 60.5% in the same month last year. Here, we can at least confirm that the ‘ratio spent against take-home pay’ has declined. (stat.go.jp)
