January 8, 2019

Japan Consumer Confidence Index

Consumer confidence continued to slide in August.

Note: Consumer confidence index was published quarterly before Mar.2004 and monthly data is available after Apr. 2004.

Published monthly by the Cabinet Office. Updated to the month of December 2018 (published on January 8th, 2019).

Recent data trend

The consumer confidence index in August was 43.3, a marginal decline from 43.5 in July. After peaking in January 2018 at 44.6, the index has been on a moderate downtrend in the past 6 months. By components, the deterioration in the past 6 months is mostly across the board. The income growth sub-index has lost a point in the 6 months to 41.8 in August. The employment sub-index lost 1.2 points in the same period to 47.7 in August. The deterioration is rather puzzling. In the last 6 months, the...

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Brief Overview of "Consumer Confidence Index"

Consumer confidence index, published by Cabinet Office as a part of "Consumer confidence survey", aims to measure Japanese households' sentiment toward consumption activities. The index consists of four sub-categories: the overall standard of living, income growth, employment and willingness to buy durable goods. By construction, an index level above 50 implies that consumers expect the situation is improving. Japanese consumers seem to have a tendency to think negatively about the future though. The average index level between 1983 and 2013 is 42.8, and the index has rarely risen above 50.

Since 2004, respondents are also asked for their price expectation. Price expectation is measured based on the ratio of households expecting prices to go up, stay the same or go down. Japanese consumers have a tendency to overestimate the likelihood of a rise in price. Between 2005 and 2012, on average 57.2% of households replied that they expect prices to rise, 25.9% replied price to remain flat and only 8.5% replied they expect the price to fall. In reality, Japanese CPI remained virtually flat throughout the period, in fact declining marginally by 0.7% in total between 2005-2012. 

 
The Next Release Date: January 30th, 2019.

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