Consumption Activity Index

Consumption activity index rose by 0.2% MoM to 104.3 in March 2017.

Published monthly by the BoJ. Updated till the month of March 2017. (Published on May 10th, 2017)

Recent Data Trend

In March 2017, the seasonally adjusted real consumption activity index(RCAI) increased by 0.2% month on month to 104.3. The index increased after a decrease of 0.4% MoM in the previous month. The increase in the index conforms with the retail sales data which increased by 0.2% MoM in March 2017. The fact that retail sales reached a 22 month high growth rate in March is a positive sign for the index but we are skeptical about the sustainablility as real wages have been stagnant since October 2016 and actually fell in March 2017. 

Among the sub-components of RCAI, durable goods index rose by 8.3% MoM. Index of non-durable goods and services fell by 0.2% MoM and 1.2% MoM. The rise in durable goods consumption might be a one off incident and may not show such high growth in future.

Brief overview

The Consumption Activity Index (CAI) is published by the Bank of Japan on a monthly and quarterly basis as a measure of short term consumption activity of the households in the economy. The data is available in both nominal and real terms. The real CAI has three sub categories namely- Durable Goods Index, Non-durable Goods Index and Services Index. A variant of the Consumption Activity Index is “Consumption Activity Index Plus" that contains statistics on digital contents delivery services that have been growing since the end of the last decade. Another variant Consumption Activity Index (adjusting travel balance) excludes the consumption by foreign visitors that causes an upsurge in total spending and does not reflect the true spending pattern of the Japanese consumers.

The supply and sales side statistics used by the CAI are the same as that used for Private Consumption in the National Accounts statistics. The correlation coefficient between two indicators is quite high too. So, it can be assumed that CAI will be similar to Private Consumption in the National Accounts. The CAI has shown that private consumption in Japan has enjoyed a moderate recovery and expansion after the Great Recession between 2008-2009, but since 2014, we observe a stagnation in the consumption activities.

For more information visit the official government page

Consumption Activity Index(Quarterly)

Next Release Date: June 7th, 2017.

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